Prime Energy chief makes case for indigenous gas

Donnabel K. Cruz doesn’t sound like an executive reciting talking points in a boardroom, but like an engineer or a chemist who has spent 25 years inside the machinery of the oil and gas business.

As president and CEO of Prime Energy Resources Development Corp., she now runs the company that operates the Malampaya gas field, the country’s single most important indigenous energy asset, at a moment when the country’s energy security has become a live national concern rather than an abstract policy debate.

Recent developments have underscored her argument more sharply than ever. The Philippines is under a declared energy emergency, driven by disruptions tied to the conflict affecting Middle East gas supply, a reminder that a nation still importing much of its energy sits exposed to shocks thousands of miles away.

The government’s response, an administered pricing regime that has effectively suspended the merchant power market, has squeezed demand for gas-fired generation across the board, as regulators prioritize cheaper renewable and coal capacity.

Malampaya gas, Cruz notes, has weathered that squeeze differently. Its price, she calculates, is roughly less than half the cost of imported liquefied natural gas LNG in the current market.

That gap, combined with a legal framework that prioritizes indigenous gas utilization because it generates government revenue, has kept Malampaya’s offtake largely intact even as the broader gas market stalls.

It is, in her telling, a structural advantage rather than a lucky break: the country built rules that reward its own molecules, and in a crisis those rules are paying off.

Complimentary business

But she is careful not to consider this as an argument against LNG. Cruz also heads Prime Infra’s LNG importation and distribution business, and she describes the two as complementary rather than competing. Indigenous gas, in her view, is the anchor that makes the whole system function, a stable floor beneath a volatile import market.

Cruz keeps returning to what she calls a gas aggregation model: blending cheaper, steady domestic gas with LNG cargoes whose prices swing with global markets to produce a combined supply that is both price-stable and secure.

The logic is straightforward. Pure reliance on LNG leaves the Philippines bidding against Europe and the rest of Asia for a tightening pool of cargoes, made tighter, in her account, by the disruption to Middle East supply.

The blend, she argues, is the hedge. Prime Infra’s recent acquisition of a 60 percent stake in First Gen’s gas-fired power plants and LNG terminal, now rebranded Prime CoreGen for the power plants, with the terminal operated through Prime Infra subsidiary Gas Aggregator Philippines Inc. (GAPI), gives the company an integrated chain from wellhead to terminal to power plant, all physically connected to Malampaya.

That infrastructure, she said, is the foundation for eventually supplying blended gas not just to power generators but to industrial users across Luzon and beyond. She concedes the model is harder to sell today, with LNG prices elevated, but insists the strategic logic does not change with the cycle.

7,000 islands, one grid problem

Regarding the peculiar burden of running an energy company across an archipelago, Cruz turns almost immediately to the islands beyond Luzon’s main grid, places still running on diesel generation that, by her estimate, has nearly doubled before the crisis.

These grids are too small to justify a full LNG import and regasification terminal, and even coal plants are hard to finance at that scale given their high upfront installation cost relative to gas.

Her proposed fixes are modest by design: modularized, smaller-scale LNG solutions, isotanks or compressed gas rather than full terminals, and aggregating demand across neighboring island grids to create a hub large enough to justify investment.

She does not claim to have solved the problem. What she describes instead is a research agenda already underway inside her own team, built on the conviction that indigenous and blended gas can make the economics work where LNG alone cannot.

Master plan needed

Cruz names access to energy, particularly in Mindanao and the islands, as the central unsolved problem, and traces it to three interlocking bottlenecks: an underdeveloped inter-island grid, financing that has grown harder to secure as the market shifts away from guaranteed take-or-pay offtake agreements toward a more merchant-driven structure, and the absence of a clear, government-mandated generation mix that would tell investors where capacity is actually needed.

Her prescription is a form of industrial policy: a Department of Energy mandate setting fixed proportions for baseload, mid-merit, and dynamic market capacity, tied to specific islands and specific fuel types. It calls for the state to draw the map so banks, generators, and grid planners can build with confidence, rather than each guessing at demand in isolation.

Engineer’s discipline

Cruz’s authority on these questions is inseparable from her biography. She began her career with Shell Philippines, where she led a refinery power transition project that shifted operations from diesel to natural gas, generating approximately $15 million in annual value improvement.

That downstream training, she said, taught her cost-consciousness measured in cents rather than dollars, a habit she carried into upstream operations at Malampaya and now into LNG.

On the technical side, she pointed to three fronts of innovation at Prime Energy: reducing redundancy in production trains without sacrificing the field’s better-than-98-percent reliability; a wells-reservoirs-facilities-management push to extract more gas from existing infrastructure without new drilling; and, longer term, using AI and reprocessed seismic data to find “the next Malampaya” without the long exploration cycle times that have historically defined the industry.

What comes next?

As the first woman to lead Prime Energy, and as chairperson of the Petroleum Association of the Philippines (PAP), Cruz describes her leadership style around what she calls a broader emotional range built from lived experience, one she believes gives her particular insight into how people and organizations actually function under pressure.

Under her PAP chairmanship, the association has focused on building shared technical data on the country’s hydrocarbon resources, encouraging cost-sharing among smaller operators to make exploration more competitive, and pushing policy that supports further domestic drilling.

Her horizon extends beyond the Philippines. Prime Infra’s acquisition of SierraCol, Colombia’s largest independent oil operator, a deal she led over roughly a year of data-driven due diligence, signals an appetite for replicating the Malampaya turnaround in other brownfield assets abroad.

American investment firm Carlyle announced 11 March that it had signed an agreement to sell SierraCol Energy to Razon’s firm.

But the through line in everything Cruz describes, from a single well in the South China Sea to an acquisition in Colombia, is the same: find underused assets, apply operational discipline, and build resilient, long-term cash flow.

For a country still working out how to power seven thousand islands, she argues that indigenous gas is not a nostalgic holdover from an earlier energy era but the stabilizer the system needs while everything else around it remains in flux.