THREE areas in Mindanao could hold the potential for natural gas production, an official of the exploration arm of state-led Philippine National Oil Co. (PNOC) said.
“We have several areas where we think are very under-explored. We actually have three sedimentary basins all located in Mindanao — one in Agusan, Davao to the east; the one in Cotabato, the center of the mainland; and then the Sulu Sea farther to the west,” said PNOC-Exploration Corp. (PNOC-EC) Vice-President for Upstream Operations Jaime A. Bacud in a virtual briefing on Thursday.
He said the region might be the location of the country’s next indigenous gas field, following the impending depletion of the offshore Malampaya project.
“We still think that there [is] natural gas potential for these areas and it could be where we could find the next Malampaya,” Mr. Bacud said.
He added that the Philippines still has plenty of untapped oil and gas resources, the utilization of which can bring the country closer to its goal of attaining energy independence.
The Malampaya gas field provides power to five natural gas-fed plants in Luzon, accounting for 30% of the island’s power generation. The offshore project also serves 20% of national demand.
In May, Senator Sherwin T. Gatchalian, who chairs the Senate energy committee, said the remaining reserves in the country’s only indigenous gas field will be completely exhausted by the first quarter of 2027.
The Philippines’ upstream energy sector is facing a “bleak” future, according to Fitch Solutions Country Risk & Industry Research, citing a continuing drop in the Malampaya field’s gas reserves and lack of investment in new exploration.
In an outlook published last month, Fitch said that the gradual decline in gas production from the field is already driving up electricity costs and causing rotational power interruptions across all major islands.
COAL DIVESTMENT
DURING the event, the top official of AC Energy Corp. said the Ayala-led company is considering scaling up its renewables capacity in Mindanao when the time is right, adding that it is more than halfway through its target of divesting in its coal assets.
“In the case of our divestment program for coal, that is quite on track. We’ve already divested effectively more than half of our total portfolio so we’ll continue to divest and continue the reinvestment process to focus on scaling up renewables, including Mindanao when the timing is right, which is hopefully around the corner,” said AC Energy President and Chief Executive Officer Eric T. Francia.
The company previously announced it is transferring all of its indirect shares in Mindanao’s largest coal-run plant in Kauswagan to its partner, Power Partners Ltd. Co. and certain affiliate companies.
According to Mr. Francia, Mindanao stands to gain from many investment opportunities in renewable energy once the region starts participating in the wholesale electricity spot market, retail competition and open access, and green energy option program.
Meanwhile, Aboitiz Power Corp., which has invested P190 billion in the development of new renewable energy projects in the next decade, is one with the country and rest of the world in decarbonization efforts, a company official said.
“But for a developing country like ours, we have a long way to go. It is possible, but it will take time. Coal remains the most reliable and at the same time, most economically viable energy source for us,” said AboitizPower Chief Operating Officer for Distribution Utilities Anton Mari G. Perdices.
Before the entry of the firm’s Therma South Inc.’s 300-megawatt baseload power plant in Davao, residents across the region were experiencing hours of power outages, he said.
“The reality is that we cannot do away with coal unless a new technology proves to be environmentally sustainable yet as reliable and as cost-effective as coal. There also has to be a balance between responsibilities of the government, private sector and consumers to make our energy system work,” Mr. Perdices added. — Angelica Y. Yang