Malampaya Royalties Can Fund PNOC Fuel Storage – Libanan

by Miriam G. Desacada

Tacloban City–Malampaya earnings could fund PNOC’s fuel storage projects, says Libanan on Sunday.

The lawmaker suggests using the royalties to develop coastal storage facilities, boosting energy security.

“Following the successful drilling of two new gas wells by the Malampaya consortium, we have very high hopes that the government will continue to generate billions of pesos in annual royalties from the project in the years ahead,” Libanan said.

“These royalties are intended for the government’s energy resource development projects and programs, so the funds can be tapped to support PNOC’s coastal fuel storage facilities,” he added.

The government raked in ₱200B from Malampaya royalties from 2014-2024, averaging ₱18.2B yearly. Libanan suggests using this to fund PNOC’s coastal fuel storage projects in Visayas and Mindanao.

PNOC could also retain more earnings to support the project.

The government has yet to report the royalties collected for 2025.

Libanan had earlier urged PNOC to invest in a strategic buffer stock of key petroleum products—mainly diesel, gasoline, and aviation fuel—to help shield the country from sudden global oil supply disruptions and price shocks.

He said the petroleum reserves could be stored in new coastal infrastructure to be established by PNOC, particularly in the Visayas and Mindanao, and released into the market during times of crisis or emergency.

“In addition to Malampaya royalties, Malacañang may allow PNOC to retain a larger portion of its annual net income so that it can fund the development of the coastal fuel storage facilities,” Libanan said.

PNOC is covered by a law requiring all government-owned and controlled corporations (GOCCs) to remit at least 50 percent of their annual net earnings as dividends to the national treasury.

However, Libanan noted that the same law authorizes the President, upon the recommendation of the Secretary of Finance, to adjust the dividend rate—either lower or higher—for specific GOCCs, as needed.

PNOC continues to generate income primarily through its wholly owned subsidiary, PNOC Exploration Corp., which holds a 10 percent stake in the Malampaya project.

Last month, businessman Enrique Razon Jr.’s Prime Energy Resources Development B.V., the operator of the Malampaya service contract, announced that two new wells are on track to deliver fresh gas supplies by the fourth quarter of 2026.

This development follows the successful drilling of the Camago-3 well and the Malampaya East-1 discovery, which are expected to extend the operational life of the Malampaya gas field by several years.

Prime Energy operates the Malampaya project in partnership with UC38 LLC and PNOC-EC.

The Malampaya project remains a critical component of the Philippines’ energy strategy, providing a reliable source of indigenous natural gas for 20 percent of Luzon’s electricity requirements while helping reduce dependence on imported fuels.