Malampaya gas proceeds climb to US$22.493 billion in 2017

Updated July 4, 2018, 10:44 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/07/04/malampaya-gas-proceeds-climb-to-us22-493-billion-in-2017/

On “sweet sixteen years” of its commercial operations, gross proceeds from the country’s Malampaya gas field had risen to US$22.493 billion, with the addition of US$1.209 billion proceeds in 2017.

Based on data culled from the Department of Energy, the total revenue share of government from that so-called “wealth from the depth” hovered at US$9.709 billion throughout the field’s 16-year gas production; while revenues of the Malampaya contractor reached an aggregate US$6.918 billion.

The consortium under Malampaya’s service contract (SC) 38 is led by Shell Philippines Exploration B.V. (SPEX) being the field operator and has 45 percent equity in the project; while another majority interest holder is American firm Chevron Malampaya LLC. The minority partner with 10 percent shareholdings is state-run Philippine National Oil Company-Exploration Corporation.

Of the aggregate proceeds, total cost recoveries on invested capital had been placed at US$6.311 billion; hence, slashing the proceeds value to US$16.181 billion.

In terms of revenues fetched just last year, US$553.54 million (or roughly R27.6 billion) had been remitted to the national government. The US dollar-Philippine peso exchange rate guidance set by the Bangko Sentral ng Pilipinas (BSP) last year was at average R49.9230 vis-à-vis the greenback.

Data would show that the royalty share the government for the year accounted for 45.8-percent; while the contractor had gross proceeds of US$369.02 million; and cost recoveries amounting to US$287 million.

Taken out from the share of the national government were income tax payments, branch profit remittance tax and the share of the local government units (LGUs) serving as host-communities to the Malampaya project.

The income tax paid from 2017 proceeds had been US$158.15 million; while total taxes settled over 16 years summed up to US$2.955 billion.

Additionally, branch profit remittance tax stood at US$47.98 million – out of the aggregate US$871.31 million from 2001 to 2017; while assistance to LGUs reached US$2.352 billion.

After deducting all these cost components, the royalty share of the national government had been trimmed significantly to US$3.529 billion (out of the total proceeds), or a final share of just 37.7 percent, DOE data had manifested.

The Malampaya field still has remaining six-year life based on the original terms of SC 38, unless the government will eventually decide on its license extension.