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the Shell Philippines Exploration B.V. (SPEX) is looking to invest an additional $80 million for the drilling of additional well under the Service Contract (SC) 38, also known as the Malampaya deep water gas-to-power project in Northwest Palawan. This was reported by Shell country chairman who said that the company would be pouring in additional investment as they see more potential reserves with the area. He said, “We are going to make additional investments. There would be a second phase.”

Completing the composition of the SC 38 consortium are SPEX (45%); Chevron Malampaya LLC (45%) and PNOC Exploration Corp. (10%). The drilling of another well in SC 38 is part of the consortium’s long-term plan, according to Jose Jerome Pascual III, SPEX finance manager.

Pascual said, “The plan is to drill another well, which is part of the overall plan for Malampaya, to further develop the contract area. Once we are able to finalize the drilling and we know the outcome of the drilling – then we can say it’s worth the further investments.”

For his part, Chua said that should the second phase drilling produces positive results, they would invest more for drilling activities in the contract area. “There is an initial $80 million committed investment. We are investing to determine the volume of reserves,” adding that “after that, depending on the results, the joint venture would decide whether to commit a much more significant investments by the first quarter. And the assessment will be in the middle of next year. it’s within the same area,” he said.

The $4.5-billion Malampaya project has an estimated reserve of 3.7 trillion cubic feet of natural gas, and supplies 2,700 megawatts of power to three natural gas power plants Sta. Rita, San Lorenzo and Ilijan in Batangas. It provides about half of the requirements of the Luzon grid and 30 percent of the entire power needs of the country.