Philippines' gas jackpot off Palawan — why Malampaya East-1 is an energy game-changer

Manila: Picture this electric fantasy: no more blackouts, lower electricity bills in the Philippines.

Even more fantastic: lesser fuel imports and billions in state revenues.

That's the charged promise of Malampaya Phase 4, as confirmed by East-1 gas well jackpot announced recently.

It's a blockbuster 98 billion cubic feet (BCF) natural gas well discovered in a previously untapped reservoir, announced on January 19, 2026 by President Ferdinand Marcos Jr.

Drilled in Service Contract 38 off Palawan by Prime Energy (45%), UC38 LLC (45%), and PNOC (10%), this gem could pump ~30% more life into the nation's lone indigenous gas field, ending a 10-year exploration drought.

It's economics: The Philippines currently buys from the international market (using only US$) to cover up to 90% of power generation from foreign producers of coal/LNG.

This has fuelled one of ASEAN's highest electricity rates (Php10-12/kWh), though solar, hydro and wind also now form a growing part of the mix.

The Malampaya East-1 could potentially slash that over-reliance in fuel imports, helping stabilise grids powering 20% of Luzon via cleaner, cheaper domestic gas.

More importantly, billions in "royalties" (the government's share of profits or production from extracting oil and gas) could flow into national coffers too — the existing Malampaya wells have already delivered $13.9 billion since 2002.

It's a good question. And a good problem to have, too.

Hopefully, it won't wind up in some lemon — ampao or "ghost" — infrastructure or get hijacked via midnight budget insertions by the next generation of Philippine lawmakers.

Filipinos would watch the money flow closely as the

Ramping up, using gas royalties the Maharlika Investment Fund (MIF) or a separate/new state fund, which could then invest in value ventures (i.e. Magnificent 7), is a good option.

That would ensure their preservation; the benefits can be shared by all Filipinos today and in the years to come, similar to what Norway's state oil fund does.

The money trail is something Pinoys need to watch closely: Malampaya royalties had waylaid via scam projects in the past.

Back to this mega gas find: this isn't just fuel; this could drive the country's energy independence.

The discovered reservoir called Malampaya East 1 or MAE-1 is located about 5km east of the existing Malampaya Field.

No firm date has been given.

Phase 4 targets 2027+, if viable. The concessionaire Prime Energy stated that full development would take 2-5 years post-testing.

Prime Energy stated that the next phase of the Malampaya 4 drilling campaign involves the completion and testing of Camago-3, followed by the drilling of Bagong Pag-asa exploration well.

Prime Energy engineers will first build the pipes that will connect the well to the production facilities to extract the natural gas that will fuel various power plants in Batangas, south of Manila, as per Energy Undersecretary Alessandro Sales.

That work (about 1km below the surface) takes time, including testing, so the actual extraction and flow of natural gas from the discovery will likely happen by the end of 2026 or early 2027.

There are currently three active oil and gas fields in the Philippines, lead by Malampaya, first discovered in 1990.

President Marcos Jr., in announcing the new find on January 19, 2026, said: “This means it can supply electricity to more than 5.7 million households, 9,500 buildings, or nearly 200,000 schools for one year.”

It is the first time in over a decade that a significant natural gas discovery has been made in the Philippines.

The Malampaya consortium is led by Filipino tycoon Enrique Razon Jr, through Prime Energy.

The consortium has invested around $893 million for the Malampaya Phase 4 drilling campaign, which involves the drilling of two new deepwater wells and an exploration field.

In 1990, Shell discovered the large Malampaya gas field, marking the country's biggest find and a major natural gas source for power generation.

Currently, Malampaya gas powers 2,700 MW of Batangas plants (about 20% of the Luzon grid); East-1 extends it to 2039, and averts a 2027 shortfall.

It also enables hybrid renewables, cuts coal/LNG imports ($10 billion+ per year), stabilises power rates.

Malampaya Phases 1-3 (2001-2024) focused on initial development and plateau production from the main Malampaya reservoir — 8-10 wells feed Luzon power plants via subsea tiebacks to platforms.

Output peaked at 16.4 MMscfd (million standard cubic feet/day), supplying 20% national power through steady depletion.​

Phase 4, started in 2025, is ongoing. It pivots to late-life extension and reserve replacement, targeting depletion edge with deeper (though riskier wells) and new reservoirs.

Given the global fossil fuel price volatility, driven by geopolitics, East-1 fortifies Phase 4's 2039 extension.

It averts the widely-reportedly 2027 depletion cliff of the existing Malampaya 1-3, and jumpstarts Filipino-led upstream revival.

Using a revolutionary gas extraction tech with bigger wells and longer life, Malampaya 4 has been certified as a "Project of National Significance".

Existing Malampaya: $13.9 billion total since 2002.

It generated ₱200 billion (2014-2023 average of ₱20 billion per year); 2024 (₱8 billion), and 2025 (₱5 billion)

East-1: ₱50 billion to ₱100 billion potential (98 BCF @ $5/MMBtu), 10-20% royalties over 10-15 years.