As we write this piece, the Commission on Audit (COA) has called for an investigation of several state agencies including the Department of Budget and Management over alleged irregularities in the disbursement of some P36 billion in royalties from the Malampaya gas fields in the Province of Palawan.
Malampaya is a joint undertaking of the national government and the private sector.
The project is spearheaded by the Department of Energy (DOE) and developed and operated by Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture partners Chevron Malampaya LLC and the Philippine National Oil Corporation-Exploration Corporation.
Palawan is exceptionally rich in natural resources but many Palawenos appear to be untouched by the benefits of its bounty.
The natural gas project in that part of the sea off Palawan’s shore fetches billions of pesos. The province is supposed to be a top beneficiary of the earnings from that project.
Many are wondering, why that treasure off Palawan’s shores have not brought much progress in the province.
The COA findings suggests that the disbursements of the Malampaya funds were not proper.
In the spirit of transparency, the DOE as the lead agency of the project should account for the funds and bare the list of Malampaya fund beneficiaries.
The DOE should also answer the following questions : Where do the fruits of Palawan’s wealth go? Who actually benefit from them? If not the ordinary people of Palawan, then who?
Another thing that baffles us : Why has that vast deposit of oil in Malampaya remained untapped? Why have we not benefited from that treasure?
At present, Malampaya yields vast amounts of natural gas, extracted by a consortium of giant multinationals. Malampaya has become synonymous with “natural gas”.
This is unfortunate. It appears it has been convenient for the multinational business interests that all of us believe that only natural gas can be extracted from Malampaya, the treasure of Palawan.
According to experts, this is misleading. Any geologist will tell us that where there is natural gas, there is oil. They are produced by the same geological process and are often found together. The natural gas, simply put, is a layer above the oil deposit. The presence of natural gas is proof that there is oil beneath it.
There is supposed to be some 3.7 trillion cubic meters of proven natural gas deposit in Malampaya. According to the United States Energy Information Administration, there were some 150 million barrels of oil there.
That was in 2008. Experts say the passage of time and the continuing extraction of natural gas may have caused the amount of the deposit to dwindle. Despite that, there could still be 30 million barrels of oil in Malampaya.
Considering the price of crude oil in the region which is in the vicinity of $55 per barrel, that means close to $2 billion worth of treasure lies in Malampaya, dormant and diminishing.
So, why are we not extracting that oil deposit?
That task may not be as easy as it sounds. We recall that the multinational business interests making billions from Malampaya’s natural gas deposits frowned on the idea of extracting the oil from that field.
That was a few years back when the administration of former President Gloria Macapagal – Arroyo thought of tapping that dormant treasure. The government then caved in to the pressure from the interests. That almost $ 2 billion-worth of oil deposit was since then forgotten.
Now, here’s something to add to “only in the Philippines”.
We heard from the energy circles that the administration of former President Noynoy Aquino has actually asked this multinational business interest which is presently running the Malampaya natural gas business to undertake a “study”.
That supposed study is on the “economic feasibility of the oil deposit in Malampaya”.
The move has elicited both puzzled looks and guffaws. Did the Pnoy government actually expect the multinational business interest to come up with an objective study on the “economic feasibility of Malampaya’s oil reserve?”
Whoever thought of advising the former President to do that must be suffering from acute memory loss or a total absence of common sense. Or, worse, that person may be trying to mislead him.
How can this multinational business interest which has made billions out of our natural gas deposit come up with an objective study?
Remember that this same interest has torpedoed any and all attempts at extracting that oil underneath the natural gas field that it has exploited for decades?
How can a multinational business interest that stood in the way of Filipinos’ benefiting from that $2 billion treasure be expected to tell the government that the oil reserves are economically viable?
When this giant business conglomerate blocked the effort at extracting that oil years ago, we understood why. Such effort will significantly “inconvenience” them.
It may be safe to conclude that, as far as the conglomerate is concerned, extraction of Malampaya’s oil may not be “economically viable”. For them, that is. For their “economy”.
Will the Duterte government rely on such “economic viability” study?
What is best is for the Duterte government itself to take a close look at what it is poised to waste.
That $2 billion treasure could do much for Palawan and the entire country.