Shell sells 45% stake in Malampaya to Dennis Uy’s firm

Dutch petroleum giant Shell Petroleum N.V. is selling its entire stake in the Malampaya gas-to-power facility to Malampaya Energy XP Pte. Ltd., a subsidiary of Dennis Uy’s Udenna Corp.

In a statement, Shell said it signed an agreement with Malampaya Energy for the sale of its 100% shareholding in Shell Philippines Exploration B.V. (SPEX).

SPEX holds a 45% operating interest in Service Contract 38 or the Malampaya gas field.

The development was confirmed by Malampaya Energy, in a separate statement, saying it signed a sale purchase agreement with Shell to acquire SPEX.

“The base consideration for the sale is $380 million, with additional payments of up to $80 million between 2022 to 2024 contingent on asset performance and commodity prices,” Shell said.

The transaction, which is subject to partner and regulatory approval, is targeted to be completed by the end of 2021.

With the sale of Shell’s Malampaya stake to Malampaya Energy, Uy’s company will now hold 90% control of the gas field in offshore Palawan.

Uy's company bought out Chevron Philippines’ share in the Malampaya Consortium, which had 45% participating interest in SC 38. 

Before Uy's planned takeover, the Malampaya Consortium was composed of SPEX, Chevron, and the Philippine National Oil Company-Exploration Corporation —which holds 10% interest.

"We are tremendously proud of Malampaya Energy for acquiring one of Shell's most successful natural gas assets in Asia, which of course includes the world-class SPEX team currently operating Malampaya,” Uy 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.

“Since it began commercial operations in 2002, Malampaya has supplied a significant portion of the Philippines’ energy demand and it will continue powering the country with indigenous gas following a safe transition of the asset and its experienced workforce,” said Wael Sawan, Shell’s Upstream Director.

“Today’s announcement is consistent with Shell’s efforts to shift our Upstream portfolio to one that is focused on nine core positions,” Sawan said.

The project has contributed over $10 billion in revenues to the Philippine government to date.

Continue employment

Shell noted that SPEX staff will continue their employment under the new ownership, providing continuity and contributing to ongoing operational reliability and safety.

Malampaya and its staff have made significant contributions to the Philippines and to the local community over the past two decades and are expected to continue playing an important role in providing energy for the Philippines, it said.

For his part, Shell companies in the Philippines (SciP) country chairman, Cesar Romero said, “Shell and the country leadership will always be grateful for the dedication, professionalism, and support that the entire SPEX organization has contributed to the wider SciP family in particular, and to our country in general.”

“This deal has no impact on other Shell businesses in the country. The Philippines remains an important country for Shell after over a century of successful operations. Shell will continue to pursue opportunities in the Philippines where it can leverage its global expertise in line with its strategy,” Romero said.—LDF, GMA News