Shell to operate Malampaya despite Dennis Uy’s buy out of Chevron, says executive

Shell Philippines will remain the operator of Malampaya gas field in offshore Palawan despite Dennis Uy’s Udenna Corp.’s buy out of all the shares of its consortium partner Chevron Malampaya LLC.

Pilipinas Shell communications manager Cesar Abaricia said Thursday that under the joint venture deal for the Malampaya consortium, Shell Philippines Exploration BV (SPEx) is the operator of the gas field.

“The contract naman kasi is kami pa rin ang operator,” Abaricia told reporters on the sidelines of Pilipinas Shell’s press conference on its campaign against Malaria on Thursday in Taguig City.

Udenna Corp., in November 2019, announced it has signed a sale and purchase agreement to acquire 100% of the shares of Chevron Malampaya, which holds a 45% interest in Malampaya. 

The deal remains subject to regulatory approvals, including the Philippine Competition Commission (PCC).

SPEx also holds 45% stake in the Malampaya consortium, while the remaining 10% belongs to state-owned Philippine National Oil Company-Exploration Corp.

Aside from Chevron, the Malampaya consortium counts as members Shell Philippines Exploration BV (SPEx), and the Philippine National Oil Company – Exploration Corp. as members.

Asked what would be the impact to Shell of Uy’s buy out of its partner Chevron in Malampaya consortium, Abaricia said it would not have material impact on the operations of the gas-to-power facility since “the expertise is with us.”

“We are just the operator kung ano [desisyon] ng partner namin, binenta na ano magagawa namin,” he said.

The Malampaya gas-to-power facility fuels three gas-fired power plants with a total generating capacity of 2,700 megawatts (MW), providing up to 30% of the power generation needs of Luzon.

Connected to onshore gas plants in Batangas, the Malampaya offshore facility in Northern Palawan was inaugurated in 2001.

Estimates showed its gas reserves are sufficient until 2022 to 2024. —NB, GMA News