PRIME Energy Resources Development B.V. (Prime Energy) is ramping up preparations to drill at least two deepwater wells in 2025 in the Camago and Malampaya East fields.

If the drilling is successful and proves that gas reserves can be produced commercially, the necessary pipelines will be installed and tied into the existing Malampaya production facilities.

Production from the new wells is expected in 2026.

According to Prime Energy Managing Director Donnabel Kuizon Cruz, the planned drilling and development, which is called “Malampaya Phase 4,” requires an investment of more than US$600 million.

Planned expenditure in 2024 is about US$187 million, including procurement of drilling equipment, subsea equipment and umbilicals, and pipelines, and securing the drilling rig.

Prime Energy and its partners secured the renewal of Service Contract No. 38 (SC 38) for an additional 15 years up to 2039.

The ceremonial signing by President Ferdinand R. Marcos Jr. and Secretary of Energy Raphael P.M. Lotilla was held in Malacañang on May 15, 2023.

After 22 years of operation, gas production from Malampaya has been declining. The renewal of SC 38 paves the way for new investment to explore and develop additional gas reserves.

To underpin the significant investment required, Prime Energy and its partners have sought the support of the Department of Energy (DOE) to ensure that there is a market for the new gas volumes, and to streamline and simplify the permits and requirements imposed by various government agencies which could hamper the completion of Malampaya Phase 4 on time and within budget.

DOE’s support will help to ensure the speedy and successful implementation of Malampaya Phase 4.

Prime Energy also clarified that China has never claimed the Malampaya contract area.

Exploration activities for SC 38, and its precursor GSEC 47, started in 1988, development activities in 1998 and production activities in 2001.

From 1988 to date, China has not intervened in any Malampaya petroleum operations. Prime Energy is optimistic that there will be no intervention or disruption from China when drilling and development activities take place in 2025 and 2026.