THE SYMPHONY OF

THE UNSUNG TALES:

THE CHRONICLES OF
MALAMPAYA

The Malampaya Deepwater Gas-to-Power project is the first

undertaking of its kind in the Philippines employing state-of-the-art
deepwater technology to draw natural gas from deep beneath
Philippine waters. The indigenous gas fuels three natural gas-fired
power stations with a total generating capacity of 2,700 megawatts to
provide 40-45% of Luzon's power generation requirements.

http://malampaya.com/about/

WHAT IS A NATURAL GAS?

Dubbed the fuel of the future, natural gas is composed
of gaseous hydrocarbons found deep underground, or
extracted through driven wells.
It is formed beneath the earths surface over millions of
years by the decomposition of organic matter, in much
the same way that oil and coal are formed. Natural gas is
85-90% methane, with varying amounts of ethane,
propane, butane, and other hydrocarbon compounds.
Some condensate and oil will always be associated with
the gas.
In its natural state, the gas is colorless, odorless, and
lighter than air
http://malampaya.com/technology/

Since October 2001, the Philippines has been importing

less fuel for power generation, providing the country
foreign-exchange savings and energy security from this
clean fuel.
Natural gas has the least CO2 emissions among fossil fuels
and is more efficient than other sources of power like coal
and crude oil.

http://malampaya.com/about/

Located in the West Philippine Sea about 80 kilometers northwest of Palawan island.

http://www.shell.com/global/aboutshell/major-projects-2/malampaya.html

THE STORY OF POWER

In 1990, upon acquisition of a 50% participating interest in SC38,
SPEX ( Shell Philippines Exploration) joined the search for natural
gas reserves. Two years later, the Malampaya gas field was
discovered, and was later found to be connected to the Camago
structure.
SPEX drilled five wells to determine the amount of gas available in
Malampaya. The findings confirmed the presence of a formidable
power source 80 kilometers northwest of Palawan islandabout 2.7
trillion cubic feet of natural gas reserves and 85 million barrels of
condensate, located some 3,000 meters below sea level. In 1995,
after comprehensive studies, it was concluded that Malampaya
presented an extraordinary opportunity for commercial gas
development in the Philippines.

In 1998, former
President Fidel V.
Ramos signed the
declaration of
commerciality of the
venture. Three-and-ahalf years later, in
October 2001, the
Malampaya Deep
Water Gas-to-Power
Project was inaugurated
in a special ceremony
at the onshore gas plant
in Batangas.

Since it began operations in 2001, the Malampaya

project has produced cleaner-burning natural gas
for three power plants in Batangas, which have a
combined generating capacity of 2,700 megawatts.
.

http://www.shell.com/global/aboutshell/major-projects-2/malampaya.html

Two additional production wells were successfully installed in 2013,

marking the completion of Malampaya Phase 2. Malampaya Phase 3
involves the design, fabrication and installation of a new depletion
compression platform, and towed toward Subic Area.
It is the first oil and gas platform designed and constructed in the
Philippines and its successful completion will position the country as a
player in fabrication for the oil and gas industry

QUICK FACTS
Malampaya collects natural gas from under the sea. The
gas passes through wells up to the production platform,
which separates the gas from water and condensate, a
high quality of fuel.
The condensate is collected every two weeks by a tanker,
while the natural gas passes through an undersea pipeline
of about 500 kilometers to a plant in Batangas. The plant
then distributes to three power stations that power about
half of Luzon.

http://www.gmanetwork.com/news/story/361486/publicaffairs/iwitness/6-things-you-didn-t-know-about-the-malampaya-platform

WHAT IS A CONDENSATE?
Gas oil, naphtha and other relatively light hydrocarbons (with some
dissolved hydrocarbon gases such as butane and propane) which
remain liquid at normal temperature and pressure. Recovered mainly
from gas reservoirs, condensates are very similar to light
stabilized crude oil and are used as feedstock for oil refining and
other petrochemical industries.

PHILIPPINE GOVERNMENT ROYALTIES

Malampaya, a joint venture of Shell, Chevron and the Philippine National
Oil Company, has generated over P315 billion in royalties for the
Philippine government since 2001.

MAGIC 59
The lifeboat can accommodate exactly 59 people, which is why only 59
people are allowed to stay at Malampaya at any given time. Each crew
lives on the platform for two weeks, then switches out with another
crew so they can spend two weeks at home .

THE DANGEROUS AFFAIR

Since Malampaya produces two highly volatile substances, gas and
condensate, the strictest safety standards are needed place to keep
employees safe. The worst-case scenario? A hydrocarbon explosion.
The platform is operating at around 400 million standard cubic feet of
gas.
http://www.gmanetwork.com/news/story/361486/publicaffairs/iwitness/6-things-you-didn-t-know-about-the-malampaya-platform

FOOD & 3PM BREAK

Every day at 3:00 p.m., they get a 15-minute break to have a snack, drink
coffee, or play billiards.
For each meal, the kitchen staff is preparing a standard 10-course meal.
A supply ship comes every three weeks, carrying 45 tons of frozen meat,
water, condiments, vegetables and canned goods.
http://www.gmanetwork.com/news/story/361486/publicaffairs/iwitness/6-things-you-didn-t-know-about-the-malampaya-platform

SHADOW OF DOUBT
The Malampaya Fund was created to finance energy
resource exploration, development and exploitation projects,
but it can also be used for "such other purpose as may be
directed by the president" as prescribed under Presidential
Decree no. 910 issued in March 1976.
In October 2009, President Gloria Macagapal Arroyo issued
Executive Order 848, allowing the government to tap the fund
for rehabilitation efforts following a series of powerful
typhoons.
http://www.abs-cbnnews.com/focus/12/01/14/leaking-lump-sums-how-malampayafund-scam-worked

PRESIDENTIAL DECREE NO. 910

CREATING AN ENERGY DEVELOPMENT BOARD, DEFINING ITS POWERS
AND FUNCTIONS, PROVIDING FUNDS, THEREFOR, AND FOR OTHER
PURPOSES
SECTION 3.Powers and Functions of the Board. The Board shall have the
following powers and functions:
d. Regulate all activities relative to the exploration, exploitation, development,
and extraction of fossil and nuclear fuels and geothermal resources and,
where necessary, prescribe and collect fees in the exercise of such power;

EXECUTIVE ORDER NO. 848

AUTHORIZING THE USE OF THE SPECIAL ACCOUNT IN THE GENERAL
FUND (FUND 151) OF THE DEPARTMENT OF ENERGY FOR PURPOSES AS
MAY BE DIRECTED BY THE PRESIDENT OF THE PHILIPPINES

The Department of Energy (DOE) is authorized to collect fees, revenue

and receipts from any and all sources including receipts from service
contracts and agreements such as application and processing fees,
signature bonus, discovery bonus, production bonus, collection from
concessionaires, representing unspent work obligations, fines and
penalties, royalties, rentals, production share on service contracts and
similar payments on exploration, development and exploitation of
energy resources in accordance with Sections 3 and 8 of Presidential
Decree (P.D.) No. 910 (Creating an Energy Development Board,
Defining its Powers and Functions, Providing Funds, Therefor, and For
Other Purposes);

the above-enumerated collections has been constituted as a Special Account in

the General Fund Fund 151 (SAGF-151) of the DOE to be used to finance
energy resource development and exploration programs and projects of the
government and for such other purposes as may be directed by the President of
the Philippines pursuant to Section 8 of P.D. No. 910

SECTION 1. Release of Funds. The Department of Budget and

Management (DBM) is hereby authorized to release funds, in such amount
as may be necessary, from the SAGF-151 of the DOE, to the implementing
agency (IA) concerned, for purposes as may be authorized by the President
of the Philippines: Provided, That the release of funds shall be subject to the
following:
a. Request for release of funds by the IA;
b. Bureau of the Treasury (BTr) certification on the availability of funds
deposited with the SAGF-151 of the DOE; and
c. Existing laws and budgetary, accounting and auditing rules and
regulations.

SHADOW OF DOUBT
P900 million in royalties from the Malampaya Fund should
have been distributed to areas hit by typhoon Pepeng and
tropical storm Ondoy.
But an audit on the funds released through the DAR found the
amount was siphoned to about a dozen bogus-NGOs linked
to alleged pork barrel scam mastermind Janet Lim Napoles.
Pork barrel scam witness Marilyn Suas has said the NGOs
were supposed to deliver agricultural packages to around 97
towns, but the funds were instead remitted to Napoles,
allegedly in collusion with DAR officials through an elaborate
scheme that involved the forging of official documents
endorsement letters and even LGU officials' signatures.

ANALYSIS
EO 848 can be prone to abuse because it can release a
money from Malampaya Fund and the likes through the
discretion of the President other than energy exploration and
research related activities ,as originally provided in PD910 .
Since the royalties can somehow be manipulated by Shell and
partner corporations, these corporations can declare an
understated statement of income and profit.
This activity will create a ripple effect by patronizing and
rearing certain whims of certain political and influential figure.
This is yet another loophole in financial management of
governments fund.