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Energy chief reiterates new terms for Malampaya

Posted on November 24, 2014

By Juzel L. Danganan

MANILA, Nov 24 (PNA) — Energy Secretary Carlos Jericho Petilla has repeated that terms with Shell Philippines Exploration BV (SPEX) as an operator of Service Contract (SC 38) or Malampaya has to change, since it does not need to charge on cost recovery.

”I don’t have a problem with the extension, however, the terms cannot be the same. Everything has been cost-recovered, why would it be the same,” Petilla told reporters Monday at the sidelines of the SM North Edsa Solar panel-Switch on at SM North Edsa, Quezon City.

Petilla added that the Department of Energy (DOE) will not make an offer on the license extension, pointing out that SPEX should be submitted in a proposal.

”Is it commensurate? I’ve been asking for their offer. But, they’ve been telling me, what’s your offer? I’m not going to make an offer,” the secretary said.

He assured the Energy Department will evaluate the proposal, when the offer is submitted, but added he has not heard from SPEX about an offer.

The energy head stressed that a new batch of drilling within the nearby areas of the Malampaya can be achieved by SPEX, but its development is dependent on whether SPEX will get the license extension, which will end by 2024.

”They said they can drill something fast. (But they’re not doing it) because there’s no extension, it is for extending the 2024 contract,” Petilla said.

Petilla said that the DOE is only looking out on maximizing the earnings of the government.

”But the extension outright, we still don’t own this, they are just the operator. I’m just trying to maximize what the government can get,” he said.

A similar call for a new offer from SPEX was made by Petilla on Dec 2013.

Last week, SPEX Managing Director Sebastian Quiniones Jr. said that the National Government has already earned USD 7.7 million from Malampaya’s revenues.

Quiniones also added that Shell is in a discussion stage with the government for the license extension of the Malampaya.

Currently, SPEX earns 40 percent for cost-recovery – as the operator – while the National government obtains 60 percent of its revenues. (PNA)

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