Dennis Uy’s Udenna completes buy-out of Chevron’s 45% stake in Malampaya

Dennis Uy’s Malampaya Philippines Pte. Ltd., wholly-owned unit of Udenna Corporation, on Wednesday announced it has completed its buy-out of Chevron Philippines’ share in the Malampaya Consortium, equivalent to a 45% stake in the gas field in offshore Palawan.

Udenna’s announcement came after the Philippine Competition Commission (PCC) gave the thumbs-up for the transaction in February. 

In a decision dated January 22, the PCC said its Mergers and Acquisitions Office found that the transaction will not likely result in substantial lessening of competition.

The planned acquisition of UC Malampaya of Chevron Malampaya LLC, which has 45% participating contractual interest in Service Contract 38 or the Malampaya gas-to-power facility, was announced late last year upon the signing of the sale and purchase agreement. 

“This strategic move enables Udenna to become a joint venture partner in an energy asset of national significance,” the company said.

Duterte backer

Uy, a Davao-based businessman who was a top contributor to President Rodrigo Duterte’s campaign kitty during the 2016 elections, has expanded his empire through several acquisitions and ventures during the Duterte administration.

In 2017, Uy went on buying binge, acquiring several companies such as Familymart, Conti’s, and Enderun.

Global Gateway Development Corporation (GGDC), a Udenna subsidiary, currently holds a 177-hectare leasehold in Clark Freeport Zone in Mabalacat, Pampanga. 

In 2019, Uy's Phoenix Petroleum and partner China National Offshore Oil Corporation (CNOC) were given the green light to proceed with their liquefied natural gas (LNG) project in Batangas. 

Uy’s Udenna further diversified by entering Mislatel Consortium—now DITO Telecommunity— with Chelsea Logistics, Mindanao Islamic Telephone Company Inc., and China's state-run China Telecommunications Corporation.

The consortium was officially declared as the country’s new major player in the telecommunications industry last November.

Late last year, Uy's Chelsea Logistics also secured the approval of the National Economic and Development Authority -Investment Coordination Committee (NEDA-ICC) to modernize the Davao International Airport (DIA).

Uy’s legal counsel and spokesperson for several of his companies Adel Tamano has stressed that Uy has been a wealthy businessman for decades.

“So all this talk … ‘Why is he buying this and that?’ Well, he’s buying businesses because he sees the opportunity and because he already has the base,” Tamano said.

Malampaya

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.

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

“For over two decades, Malampaya has been the cornerstone of the country’s gas industry and continues to service approximately 30% of the national demand for electricity,” Udenna said.

Since it began commercial operations in 2001, the Malampaya project has produced cleaner-burning natural gas which supplies five power plants in Luzon, the country’s largest island, with a combined capacity of 3,200 megawatts, according to company.

“We see immense potential in natural gas, the fuel of the future, and we are optimistic and excited to bring its full benefits to Filipinos. Taking a long view, this new milestone moves us closer to Udenna’s vision of being an indispensable partner in nation building,” Uy said.

“We look forward to working with our joint venture partners, Shell and PNOC-EC, and Malampaya’s key stakeholders, including the Philippine Department of Energy, to ensure that Malampaya continues to play an important role in developing a sustainable clean energy business in the Philippines,” he added.

Shell earlier this month said it will remain the operator of the Malampaya gas field even with Udenna's buy-out of Chevron's shares. — BM, GMA News