Lawmaker wants Malampaya contract renegotiated

The House of Representatives wants the Department of Energy (DOE) to renegotiate the government’s contract with the consortium operating the Malampaya natural gas fields in offshore northwest Palawan.

House of Representatives committee on energy chairman Rep. Alipio V. Badelles in House Resolution 888 called for an inquiry into the economic viability of developing and extracting the oil rim of the Malampaya gas field and allowing other parties outside of the consortium to undertake the project.

"We want to know if the existing contract can still be amended or renegotiated to allow a third party to develop the oil rim, there has to be an agreement between parties. We want to hear the side of the consortium which appears to be reluctant and doesn’t want to let a third party come in, but at the same time we have to strike a balance between the national interest and the consortium’s interest," said Badelles.

Currently, the DOE is still in talks with the Malampaya deep water gas-to-power consortium to pursue the development of the oil rim.

The consortium led by Shell Exploration Phils. B.V., Chevron-Texaco and the state-owned Philippine National Oil Co.-Exploration Corp. (PNOC-EC) earlier junked plans to push through with the plan to extract oil, also within the gas field it is currently operating, saying the volume is not commercially viable.

"The consortium has to prove that developing the oil rim is not economically viable and will subsequently hurt their gas operations," Badelles said.

He pointed out that the probe will also focus on renegotiating the contract’s indemnity clause of $12 billion that guarantees compensation for any damage to the profitability of the natural gas business.