Metro Manila (CNN Philippines, May 23) — The National Youth Movement for the West Philippine Sea (NYMWPS) is calling on President Ferdinand Marcos Jr. to reject the recently signed renewal of the Malampaya Service Contract 38, arguing that the gas field should be controlled by “qualified” companies or by the national government to secure proceeds that will benefit the Filipino people.
Dr. Celia Lamkin, founder and global chair of NYMWPS, pointed out that the two private service contractors of Malampaya are new to the petroleum exploration and production industry, and “do not have the technical experience to operate the Malampaya gas field.”
“The extension of the service contract for 15 more years in favor of Enrique Razon (Prime Infra) and Dennis Uy (Udenna), by President Bongbong Marcos, is a clear failure of government to benefit fully from our own petroleum resources, leading to government failure to respond effectively to public welfare needs,” she said.
The Malampaya gas-to-power facility is currently operated by Prime Infrastructure Capital owned by Enrique Razon Jr., Udenna Corp. owned by Dennis Uy, and the Philippine National Oil Company (PNOC), a government-owned corporation.
Prime Infra and Udenna each control 45% interest, or a total of 90% interest, in the gas field. Meanwhile, PNOC holds the remaining 10%.
The NYMWPS noted that Udenna and Prime Infra earn about ₱50 million each per day, or a combined ₱100 million a day from Malampaya operations—which the Philippine government could earn had it taken full control of the operations of the gas field.
Meanwhile, the $308 million proceeds or contractors’ share on the Malampaya Service Contract last year should have gone to the government and used for “the benefit of the people and the development of the country,” according to exploration geologist Eduardo Mañalac, also a former undersecretary of the Department of Energy (DOE) and former president of the PNOC.
“What we’re fighting for and what we are concerned about is giving away the Malampaya proceeds amounting to at least, based on last year’s numbers, about $300 million every year to companies that are neither technically or financially capable as required by the law and such we feel like the Filipino people has been shortchanged again instead of it getting this benefit, this money, out of their own oil and gas,” Mañalac said.
He explained that by taking control of Malampaya, the government will help prevent the abnormal increases in electricity prices and keep rates stable.
“The major part of the electricity rate is the fuel. So, if you can reduce the cost of fuel, that will directly affect the cost of electricity as well. So, it is important that the government aims or one of the goals should be to take control of its oil and gas reserves,” said Mañalac.
With the renewal of the Malampaya Service Contract 38 until 2039, the former DOE official also raised security concerns in the gas field.
“We need help from legitimate oil companies to drill wells, especially in the West Philippine Sea where a strong military country is claiming the same area. It makes it more difficult for us to drill for oil and gas in the conflicted area in the West Philippine Sea,” he said.
“We were very disappointed when he announced that he has approved the renewal, for 15 years, of this service contract, meaning 15 years more for these two, again, “unqualified” companies to be taking away the profits that should have gone to the Filipino people,” Mañalac added.
