January 20, 2026
MANILA – President Ferdinand Marcos Jr. on Monday announced the discovery of a new gas source near the depleting Malampaya field off Palawan province, the country’s first natural gas discovery in more than a decade that is expected to significantly boost the country’s energy supply and strengthen long-term energy security.
The well called Malampaya East-1 (MAE-1) is estimated to contain around 98 billion cubic feet (2.8 billion cubic meters) of gas in place.
“This is equivalent to nearly 14 billion kilowatt-hours of electricity in a year. That means it can supply power to more than 5.7 million households, 9,500 buildings, or nearly 200,000 schools for one year,” Marcos said in a recorded video message posted on his social media pages.
“This helps Malampaya’s contribution and strengthens our domestic gas supply for many years to come,” he added.
Aside from natural gas, also found in the untapped reservoir were condensates, which are a high-value liquid fuel.
The discovery will also support the government’s efforts to stabilize the country’s power supply, which is heavily dependent on imported coal.
According to the President, initial testing showed that the well flowed at 60 million cubic feet (1.7 million cubic meters) per day, indicating “that the well has the potential to produce even more, confirming it is a high productivity resource, comparable to the original Malampaya wells.”
For comparison, the Malampaya natural gas field yields 429 million cubic feet (12 million cubic meters) per day at 100-percent production.
Initial well data also indicated the MAE-1 natural gas volumes to be equivalent to around a third of the remaining gas reserve of Malampaya.
Marcos also touted that the drilling of the MAE-1 was led by a Filipino team, which was completed without any accidents or environmental incidents.
Energy Secretary Sharon Garin said the discovery proved “the world-class capability of Filipino engineers in securing our country’s energy future.”
Extended contract
MAE-1 is located about 5 kilometers east of the existing Malampaya gas-to-power project, which supplies natural gas to four power plants in Batangas province.
The project is operated by the Service Contract 38 (SC 38) consortium, a local venture led by Prime Energy Resources Development B.V. of ports and gaming tycoon Enrique Razon, in partnership with UC38 LLC of Davao-based businessman Dennis Uy’s Udenna Corp., and state-run PNOC Exploration Corp.
“This gas discovery is a victory for the Filipino people,” SC 38 operator Prime Energy said in a statement.
“When we assumed operatorship, we committed to the President and the nation to breathe new life into Malampaya and revitalize the indigenous natural gas sector. Today, we are delivering on that commitment,” it said.
The Malampaya gas field, the country’s first and only indigenous gas resource, currently supplies about 40 percent of Luzon’s electricity needs.
It started production in 2001, but is expected to be commercially depleted by 2027.
The SC 38 contract, which was awarded to the consortium in December 1990, was renewed in May 2023 by President Marcos to allow the continued extraction of natural gas from the Malampaya gas field until February 2039.
A day after the signing, the Malampaya consortium committed an initial investment of $600 million to continue production and put new wells into commercial operation in 2026.
MAE-1 is the first milestone under the Malampaya Phase 4 drilling campaign, which involves the drilling of two new deepwater wells, MAE-1 and Camago-3, along with Bagong Pag-asa-1, a new exploration field.
Palawan eyes benefits
Since its inception, Prime Energy said the Malampaya project has generated more than $13.9 billion (P827 billion) in revenues for the government, while significantly reducing dependence on imported fuels.
The Malampaya project began commercial operations in January 2002.
The agreement to develop the Malampaya gas field was first awarded to Shell Philippines Exploration in 1990.
Uy bought the 45-percent stake held by Chevron for $565 million in 2020, while Shell sold its 45-percent stake and the right to operate the project to Razon in 2022.
Palawan officials hailed the discovery of the new natural gas source as a historic and welcome development for the Philippines’ energy security.
Palawan Board Member Ryan Maminta noted that while the province does not directly benefit from Malampaya since it is not connected to the main power grid, the discovery can possibly increase subsidies through the universal charge for missionary electrification.
In an interview, Maminta said a bill is pending in the House of Representatives to establish “a revenue-sharing scheme for host provinces in revenues generated by the national government from mining and energy operations.”
Maminta said the province would study ways to acquire financial aid from national revenues while the bill is pending.
He added that the provincial board would draft proposals for future financial assistance from revenues generated by new discoveries in Palawan. —WITH REPORTS FROM LISBET K. ESMAEL, GERALDFORD TICKE AND INQUIRER RESEARCH