Multinational giants Chevron Corporation and Royal Dutch Shell have pocketed over P350 billion in revenues from the Malampaya gas field project prior to their respective exits from the venture.

As culled from government documents, the royalty share of the two foreign energy giants had been on top of the roughly US$6.5 billion or more than P300 billion cost recoveries that they fetched from the project – and that accounted for the reimbursements to them on investments that they injected into the facility’s development and operations.


Factoring in both the royalty share and cost recoveries of the consortium-members in Malampaya’s Service Contract 38, that already summed up to more than P650 billion.

As of 2018 or a year prior to Chevron’s exit, the revenue share of the contractors had already been at more than US$7.2 billion – that’s inclusive of the share of minority shareholder state-run Philippine National Oil Company-Exploration Corporation.

Sources from government noted that Chevron still earned additional revenues in 2019; while Shell continues to have its share of revenues until the conclusion of its 45-percent equity sale to Udenna Group of businessman Dennis Uy, which is targeted by the end of the year.

“So when the share of PNOC-EC is carved out, Shell and Chevron’s share in the royalties could still hover at more than P350 billion – and they also have fully recovered all investments they have infused into the project,” the source explained.

Beyond their royalty share and cost recoveries, Chevron also cornered additional cash of US$565 million on its 45% stake divestment to the Uy-led firm in a transaction that was closed around March last year; while Shell will corner US$460 million from its own sale of interest to Malampaya Energy XP Pte. Ltd., another subsidiary of Udenna.

Since the start of the Malampaya field operations in 2001, it was fleshed out that the share of contractors had been at: US$6.80 million in the initial year; US$77.40 million (2002); US$97.70 million (2003); US$108 million (2004); US$131.40 million (2005); US$331.30 million (2006); US$470.90 million (2007); US$700.20 million (2008); US$438.10 million (2009); and US$494 million (2010).

In the succeeding years, the revenue share of the contractors had been at: US$756.40 million (2011); US$741.70 million (2012); US$564.30 million (2013); US$599.80 million (2014); US$742.46 million (2015); US$288.52 million (2016); and US$369.02 million (2017).

On capital invested, the consortium-members in Malampaya’s Service Contract 38 also had the following cost recoveries: US$39.90 million (2001); US$451 million (2002); US$568.80 million (2003); US$629.60 million (2004); US$765 million (2005); US$303 million (2006); US$233 million (2007); US$211.20 million (2008); US$302.40 million (2009); US$332.80 million (2010); US$201.70 million (2011); US$296.30 million (2012); US$481.30 million (2013); US$400.60 million (2014); US$469.51 million (2015); US$338.72 million (2016); and US$287 million (2017).

In the initial development cycle of the Malampaya project, the consortium-members invested roughly P2.0 billion; and additional capital outlay of US$1.0 billion had been coughed up in 2015 for the drilling of additional wells and the installation of the depletion compression platform that helped sustain the production of the field as anchored on commitments under its gas sale and purchase agreements (GSPAs).

Given the exit of field operator Shell Philippines Exploration B.V. (SPEX) in the upstream gas venture this year, the Senate Committee on Energy will quiz the Department of Energy (DOE) this week on the criteria of approval that it will employ on the sale of the company’s 45-percent stake to Udenna.

The Senate body will also scrutinize the technical and financial capacity of the buyer-firm to ensure the continuous operation of the field as well as targeted prolonging of its production life once the service contract of the Malampaya venture is renewed or extended by the government.

Source: Manila Bulletin (