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President Ferdinand Marcos Jr. renewed Malampaya Service Contract No. 38 (SC 38) on Monday, allowing the gas field to continue producing for 15 years until February 22, 2039.

The contract renewal, initially scheduled to expire in 2024, was formally signed at the Malacaang Palace by Marcos, who noted that Malampaya supplies 20 percent of Luzon’s energy requirements, making it important for the nation to attain energy security.

“This is the key to advancing the national interest in energy and our push for energy security. This project will lessen our reliance on foreign oil while maintaining a steady supply of energy, according to Marcos.

According to Marcos, the official policy of accelerating the discovery and production of the nation’s indigenous petroleum and the Constitution align with the 15-year extension of the Malampaya gas field concession.

To maximize the nation’s energy mix, he reaffirmed the administration’s commitment to actively pursue the exploration, development, and exploitation of the nation’s indigenous energy resources.

As we extend Service Contract (SC) 38, we optimistically anticipate continuing to produce and utilize the Malampaya gas field’s residual reserves and further exploring and developing its unrealized potential.

The Malampaya Project will lessen the nation’s reliance on imported oil and guarantee a more reliable supply of greener energy from a domestic source.

Marcos advised the Department of Energy (DOE) to supervise the project’s execution closely and ensure that the consortium’s objectives are consistent with the nation’s needs.

The renewal of SC 38 was hailed by DOE Secretary Raphael Lotilla, who also noted that the department had “carefully evaluated” the partnership.

The assessment validated the consortium’s ability to continue the production activities and fulfill its duties under the renewal agreement, according to Lotilla, which considered the consortium’s legal, technical, and financial capabilities.

Lotilla states, “The DOE recommended the service contract renewal, anchored on the consortium’s commitment to explore and evaluate additional gas resources actively.

The government “aims to uphold responsible and sustainable energy practices while effectively managing the valuable resource that is the Malampaya gas field,” he continued. “Through the strict due diligence observed.”

The president’s father, former president Ferdinand E. Marcos Sr., first established this policy in 1972 through the historic Presidential Decree No. 87.

The Malampaya Deep Water Gas-to-Power facility has been a windfall to the Philippines since the gas field was discovered more than three decades ago. The facility was put into service in 2001, delivering 20% of Luzon’s energy needs.

According to a news release from the Presidential Communications Office, the project allowed the government to bring in PHP374 billion in revenue.

The project generated roughly PHP26 billion in government income in 2022 alone.

Speaker of the House Martin Romualdez, Senator Raffy Tulfo, Executive Secretary Lucas Bersamin, Chief Presidential Legal Counsel Juan Ponce Enrile, Presidential Communications Secretary Cheloy Garafil, Defense Officer-in-Charge Undersecretary Carlito Galvez Jr., Chairperson of Prime Infrastructure Enrique Razon, and President and CEO of Philippine National Oil Company – Exploration Corporation Franz Josef George Alvarez were among the dignitaries present at the event.

Speaker Romualdez, meantime, applauded the signing of the renewal deal, which would save company losses and lessen the pain caused by recurrent brownouts.

In a statement, Romualdez stated, “This is a positive development as the Malampaya gas field provides a considerable amount of our country’s energy requirement.

According to Romualdez, the new arrangement would not only lessen the nation’s reliance on foreign oil imports to run its power plants, but it would also contribute to stabilizing the cost of energy.

More importantly, he continued, “It would increase our power reserves and stop brownouts, which cause losses for businesses and suffering for our people.”

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