THE government’s share from the energy resource development fund, commonly known as the Malampaya Fund, reached P16.25 billion, 21 percent higher than the previous year’s collection.
Data obtained by the BusinessMirror showed that the Department of Energy (DOE), which collects Malampaya royalties, recorded a collection of P16,250,694,944.30 in 2017. This brings the total royalties to P251,893,422,351.68 since 2002. The highest collection—P37,458,390,948.09—was recorded in 2009, records show.
The DOE’s collection is turned over to the Bureau of the Treasury.
Government officials, in an interview, said the DOE issues two receipts to Shell Philippines Exploration BV (Spex), operator of the Malampaya Deep Water Gas-to-Power Project. Normally, they explained, the amount is broken down to two items: net share of the national government and source of assistance to local government units (LGUs). However, in the DOE’s books, the Malamapaya collection is “taken as a whole, since we no longer allocate it to LGU shares when we submit it due to the pending case on the entitlement on LGU share.”
Spex, added the officials, pays the DOE on a monthly basis. The amount, however, varies depending on the peso-dollar exchange rate and proceeds from the gas sales.
The Malampaya gas field in offshore Palawan fuels three natural gas-fired power stations with a total generating capacity of 2,700 megawatts to provide 30 percent of Luzon’s power-generation requirements. 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 carbon dioxide among fossil fuels, and is more efficient than other sources of power like coal and crude oil.
The Malampaya project is a joint undertaking of the Philippine government and the private sector. The project is spearheaded by the DOE, and developed and operated by Spex with a 45-percent stake on behalf of joint-venture partners Chevron Malampaya Llc.—also with a 45-percent stake—and PNOC Exploration Corp. PNOC holds the remaining 10 percent. Under the service contract agreement, 70 percent of the gross proceeds from the sale of natural gas would go to the contractor to recover the investment cost. The remaining 30 percent is shared by the government and the consortium on a 60-40 basis, respectively.
The DOE has called on lawmakers to pass a legislation that will allow the government to tap the Malampaya Fund to pay for the P53 billion worth of debts incurred by the National Power Corp. (Napocor) over the years.
The Malampaya Fund could only be utilized for energy-development projects, unless there is a law that says otherwise. “We cannot utilize it except for ERD [energy-resource development],” Energy Undersecretary Felix William B. Fuentebella said.
For this to be implemented, Fuentebella added, “It can’t be done on an executive order alone. It has to be coursed through a legislation.”
These debts—in the form of stranded debts and stranded contract costs‚ are being passed on to consumers via the collection of universal charge, an item found in the electricity bills.
Stranded debts refer to any unpaid financial obligations of Napocor that have not been liquidated by the proceeds from the sales and privatization of Napocor assets. Stranded contract costs of Napocor or distribution utility, meanwhile, refer to the excess of the contracted cost of electricity under eligible contracts over the actual selling price of the contracted energy output of such contracts in the market.
The stranded costs are due to onerous “take-or-pay provisions” in Napocor contracts with independent power producers. In essence, this allowed the IPPs to charge Napocor for used and unused power.