The consortium led by Shell Philippines Exploration B.V. (SPEX) is investing an additional $80 million for the drilling of another well under Service Contract (SC) 38 or the Malampaya deep water gas to power project in Northwest Palawan.

Shell country chairman Edgar Chua said this is because they see more potential reserves within the area. “We are going to make additional investments. There would be a second phase,” Chua said.

The SC 38 consortium is composed of SPEX (45 percent); Chevron Malampaya LLC (45 percent) and PNOC Exploration Corp. (10 percent).

“The plan is to drill another well, which is part of the overall plan for Malampaya, to further develop the contract area. Once we are able to finalize the drilling and we know the outcome of the drilling – then we can say if its worth further investments,” SPEX finance manager Jose Jerome Pascuall III said.

Chua said “there is an initial $80 million committed investment. We are investing the $80 to determine the volume of reserves.”

According to Chua, if the second phase drilling shows positive results, they will be putting in more investments to finance more drilling activities in the contract area.

“After that, depending on the results, the joint venture would decide whether to commit a much more significant investment by the first quarter. And the assessment will be in the middle of next year. It’s within the same area,” he said.

Pascual said the plan will actually involve an intensified drilling operation at the Malampaya site. “There will be a series of wells, it really depends on the appraisal well we will be drilling,” he said.

The $4.5-billion Malampaya project, which has an estimated reserve of 3.7 trillion cubic feet and supplies 2,700MW of power to three natural gas power plants, namely Sta. Rita, San Lorenzo and Ilijan in Batangas.