Razon secures go-ahead from DOE for Malampaya deal

The Department of Energy (DOE) on Monday gave the go signal for Razon-led Prime Infrastructure Capital Inc. to acquire the 45% interest of Shell Philippines Exploration BV (SPEX) in the Malampaya Service Contract 38.

In an emailed statement, the DOE said it approved the transaction after a “thorough review,” with the approval conditioned on SPEX remaining as a subsidiary of Prime Infra.

“Prime Infra was found to be technically, financially, and legally qualified as a transferee and as successor to Shell as Operator of the Malampaya natural gas project,” the DOE said.

“SPEX, as a Prime Infra subsidiary, will continue to be technically competent and financially capable to operate the Malampaya Service Contract 38,” it added.

Prime Infra in July announced that its unit Prime Exploration Pte. Ltd. signed a share purchase agreement acquiring Malampaya Energy from Davao-based Dennis Uy’s Udenna Corp.

To recall, Uy’s Malampaya Energy inked a share purchase deal with Shell Petroleum N.V. to acquire SPEX in May 2021, but this did not push through after the Philippine National Oil Company Exploration (PNOC-EC) withdrew its consent.

Uy’s group also earlier acquired the 45% share of Chevron Philippines in the Malampaya Consortium — through UC Malampaya — in 2020.

For its part, Prime Infra said it is set to assume full ownership and control of SPEX by November 1, 2022, with a commitment to ensure continuity of production as long as the reserves support it.

“We welcome DOE’s thorough review and subsequent approval of the SPEX sale given the urgency to sustain the operations of Malampaya — a vital energy installation and symbol of national pride — and to plan for the further development of the existing reserves in light of the current power under supply,” Prime Infra chairperson Enrique Razon said in a separate statement.

“We will contribute by doing all that can be done to produce as much gas as possible to sustain production in support of the power demand in Luzon,” he added.

Prime Infrastructure serves as the infrastructure arm of the Razon group, with focus on energy, water, and waste management.—AOL, GMA News