President Ferdinand Marcos Jr. announced on March 26, 2026 the successful drilling and testing of the Camago-3 well in the Malampaya gas field offshore Palawan, the second consecutive discovery under the $893-million Malampaya Phase 4 campaign. Operator Prime Energy Resources Development B.V., a subsidiary of Enrique Razon’s Prime Infrastructure Capital Inc., confirmed the well flowed at up to 60 million standard cubic feet of gas per day during testing, with recoverable volumes estimated at approximately 2.5 times those of the earlier Malampaya East-1 discovery made in January. Together, the two wells are projected to extend the operational life of Malampaya, the Philippines’ only commercial natural gas source, by approximately six years.
Key Facts At A Glance
- Camago-3 flow test confirmed up to 60 million standard cubic feet of gas per day (MMscfd)
- Estimated recoverable gas: approximately 2.5 times greater than Malampaya East-1 (MAE-1), discovered January 19, 2026
- Combined Camago-3 and MAE-1 wells projected to extend Malampaya field life by approximately six years
- Total Phase 4 investment: $893 million, led by Prime Energy under Service Contract 38 (SC 38)
- SC 38 consortium: Prime Energy Resources Development B.V. (operator), UC38 LLC, Prime Oil & Gas Inc., and PNOC Exploration Corp.
- First gas delivery from Malampaya Phase 4 targeted for Q4 2026
- New subsea pipelines being installed — the first since 2000 — to tie Phase 4 resources into the Malampaya platform
- Malampaya indigenous gas costs approximately ₱4.80/kWh versus approximately ₱10.30/kWh for imported LNG
- Follow-on exploration well Bagong Pag-asa, located 30 km north of Malampaya, already in planning
- Malampaya has generated more than $14 billion in revenues for the Philippine government since inception
The Field And The Campaign
The Malampaya Deep Water Gas-to-Power Project, located approximately 80 kilometers northwest of Palawan in the South China Sea, has been the backbone of Luzon’s gas-fired power supply since commercial operations began in January 2002. At its peak, the field supplied 35 to 40 percent of Luzon’s electricity requirements, delivering gas via a 504-kilometer subsea pipeline to four combined-cycle gas turbine power plants in Batangas: Santa Rita (1,000 MW), San Lorenzo (500 MW), San Gabriel (414 MW), and Avion (97 MW), with a combined capacity of more than 2,000 MW. As the reservoir naturally declined over the following two decades, the field’s contribution to Luzon’s grid dropped to approximately 20 percent.
In anticipation of accelerating depletion, Prime Energy assumed operatorship of SC 38 in 2023 and committed to an initial investment of $600 million to sustain production and drill new wells. The Malampaya service contract was extended by the Marcos administration until 2039. The broader Malampaya Phase 4 campaign, now valued at $893 million, targets reserve replacement through two new deepwater development wells — MAE-1 and Camago-3 — and one exploration well, Bagong Pag-asa, at a site approximately 30 kilometers north of the existing field. Phase 4 has been certified by the Philippine government as a Project of National Significance.
The Camago-3 Well
The Camago-3 well was announced by President Marcos in a video statement on March 26, describing it as the second major milestone under Phase 4 and noting that the field’s cost profile for power generation was materially below the cost of imported gas. Malampaya indigenous gas currently costs the power sector approximately ₱4.80 per kilowatt-hour to generate electricity, compared to approximately ₱10.30 per kilowatt-hour using imported LNG, a differential of more than double that has become increasingly consequential as spot LNG prices in Asia surged to approximately $25 per MMBtu following the Strait of Hormuz disruptions in late February 2026.
Prime Energy confirmed on March 26 that the Camago-3 well flowed at rates of up to 60 MMscfd during testing. The company stated the well’s recoverable volumes are approximately 2.5 times greater than those confirmed at MAE-1, which had earlier been assessed at approximately 98 billion cubic feet of gas in place. Combined, the Phase 4 wells are projected to extend Malampaya’s productive life by an estimated six years from current trajectory. The Department of Energy confirmed the completion of the flow test, which Prime Energy characterized as placing the Phase 4 program firmly on track for first gas delivery in Q4 2026.
Infrastructure: First Subsea Pipelines Since 2000
A parallel infrastructure development accompanying the Camago-3 announcement involves the installation of new subsea pipelines to tie the Phase 4 resources into the existing Malampaya production platform. Marcos described this as the first time new subsea pipelines had been laid in Philippine waters since 2000, when the original Malampaya infrastructure was constructed. Prime Energy confirmed that the pipelines are being installed to strengthen the field’s large-scale offshore construction capability and to ensure Phase 4 gas can be routed through the existing 504-kilometer gas export pipeline to the Onshore Gas Plant in Batangas for distribution to power plant customers. The president framed the pipeline investment as infrastructure rebuilding rather than incremental field extension, stating that the program represents rebuilding the country’s energy infrastructure from the ground up.
The Energy Security Context
The Camago-3 announcement arrived amid the Philippines’ most acute energy crisis in decades. President Marcos signed Executive Order 110 declaring a state of national energy emergency on March 25, the day before the Camago-3 confirmation, citing the disruption to global fuel supply chains from the Middle East conflict. The Philippines imports approximately 98 percent of its crude oil from the Middle East and relies on coal for approximately 60 percent of electricity generation. LNG-fired power plants, which began receiving imported cargoes in April 2023 as Malampaya production declined, became acutely exposed to spot price volatility following the effective closure of the Strait of Hormuz.
The cost differential between Malampaya indigenous gas and imported LNG was central to Marcos’ framing of the discovery. As the DOE moved simultaneously to suspend the Wholesale Electricity Spot Market and implement emergency dispatch guidelines prioritizing renewables, coal, and indigenous sources, Camago-3’s confirmation provided the government with a domestic gas supply lever that is structurally insulated from global spot price movements. The Philippine Energy Plan had projected LNG imports would rise by 508 percent between 2025 and 2029 as Malampaya declined; the Phase 4 results do not eliminate that trajectory, but provide a buffer that reduces the pace of import dependence in the near term.
Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., noted publicly that the Camago-3 development came at a crucial time, describing the discovery as support for the country’s energy security drive. Prime Energy itself characterized the results as exceeding expectations for a field initially contracted under assumptions of natural decline, stating that the pace of delivery in less than three years since the SC 38 renewal reflected top-quartile international oil and gas performance.
Next Steps And Bagong Pag-Asa
The next milestone in the Phase 4 campaign is the drilling of the Bagong Pag-asa exploration well, located approximately 30 kilometers north of the existing Malampaya field in a previously undrilled area. If gas is confirmed at Bagong Pag-asa, the well will undergo drill-stem testing to assess its production potential. No timeline for the spud date of Bagong Pag-asa has been publicly confirmed by Prime Energy as of the date of this report.