PNOC-EC ready to put in add’l $40 M in Malampaya project

The Philippine National Oil Co. Exploration Corp. (PNOC-EC) will infuse an additional $40 million into the Malampaya natural gas project this year, said PNOC-EC president Rufino Bomasang yesterday.

The $40 million is part of the pro rata cash infusion among Malampaya partners programmed for 2000.

PNOC-EC, a oil and gas exploration subsidiary of state owned PNOC, holds a 10 percent stake in the $2-billion project which will begin commercial operation this October. Shell Phils. Exloration BV (Spex) and Texaco each hold a 45-percent stake.

To date, PNOC-EC has put in $160 million into the project. The $160 million is deposited in an escrow account with Citibank NA.

Bomasang said the additional $40 million will probably come from an estimated $300 million bond issue PNOC will float middle of this year.

Under the cost recovery agreement, 70 percent of the project’s proceeds will go to Spex and Texaco. The two operators will also have a 40 percent cut of the revenues of the balance 30 percent. PNOC-EC gets the rest.

"We are confident that we shall have some money of our own from our share of the Malampaya gas and condensate sale by 2002. This will support our activities, including the need for any additional capital infusion for Malampaya," Bomasang said.

The consortium expects to spend another $600 to $700 million to develop an oil rim below the gas reserve to test if the field could also produce oil. Drilling of an exploratory well, Iloc-1, is scheduled early next year.

Malampaya contains at least 2.6 trillion cubic feet of gas, enough to fire up between 2,700 and 4,000 megawatts of installed power generating capacity for the next 20 years. The field also contains 80 million to 120 million barrels of condensate, which will be produced simultaneously with the gas.