In a statement the Philippines Department of Energy (DOE) Undersecretary Eduardo Mañalac said, “Shell decided that the Malampaya oil wells, which earlier reports said would require US$400 million in investments, is too small a project for the worldwide company. For such a huge capital investments, SPEX only hope to drill 30 to 35 million barrels of oil, may not be a priority for [Shell] but for us, the government, we need this oil to boost our reserves.”
“The DOE is now in the final discussions with SPEX to formalise its informal withdrawal from the oil rim projects. We are concluding talks with Shell [and then] development plans for the Malampaya gas fields can continue while we approach other groups interested in the reserves.
“The development for the oil reserves are now in review and that we have to find someone as soon as possible. We cannot let it lie idle or we lose the chance to maximise Malampaya potential. The DOE is hoping that within the week, SPEX would have formally withdrawn from the development,” added Mañalac.
Under the deal signed between SPEX and the Filipino Government, the former has the right to abandon the Malampaya project at its own discretion. Apparently, SPEX has had difficulty drilling at the area and has voiced its doubts on the commercial viability of the area.
Energy Secretary Vincent Perez has announced three firms have declared their interest to take over the SPEX development. Perez did not provide any further details. As it stands at the moment, SPEX has a 45% stake, ChevronTexaco has a 45% stake, and PNOC holds the balance.
