Udenna buying Chevron’s stake in Malampaya

By Victor V. Saulon
Sub-Editor

A UNIT of Udenna Corp. has signed a sale and purchase agreement to acquire the 45% stake of Chevron Malampaya LLC in the deepwater gas-to-power project located offshore of northwest Palawan, Udenna Chairman and Chief Executive Officer Dennis A. Uy said in a statement on Wednesday.

“The acquisition of Chevron’s interest in the Malampaya gas field marks an important milestone for Udenna, fitting strategically with our long-term ambitions of developing a sustainable clean energy business in the Philippines,” Udenna Chairman and Chief Executive Officer Dennis A. Uy said in a statement on Wednesday.

The sale and purchase agreement was signed on Oct. 25 between the unit of Chevron Philippines, Ltd. and Udenna unit UC Malampaya Philippines Pte. Ltd. for the latter to acquire the full stake of the Malampaya project consortium partner.

Udenna said the signing of the agreement marks an important milestone in bilateral discussions between Chevron and Udenna over the past 12 months.

“[A]t Udenna, we believe in the benefit of promoting natural gas as an essential fuel to support the country’s growing energy needs and economic growth,” Mr. Uy said.

Udenna, which holds the Davao City businessman’s diverse investments, said completion of the transaction remains subject to regulatory approvals, including from the Philippine Competition Commission.

It said that the company is not a participant in any other upstream fields nor in any links of the gas-to-power value chain.

“As a result, Udenna is free of any conflict of interest with regards to this acquisition,” it said.

Aside from Chevron, the other stakeholders in the Malampaya project under the Department of Energy (DoE)-awarded Service Contract 38 are Shell Philippines Exploration B.V. (SPEx) with 45%, and state-led Philippine National Oil Co. Exploration Corp. (PNOC EC) with the remaining 10%.

SPEx is the operator of the project, which fuels up to 30% of the country’s power needs and has contributed over $10 billion in government revenues.

“We look forward to working with the joint venture partners, Shell and PNOC, and Malampaya’s key stakeholders, including the Philippines Department of Energy, to ensure that Malampaya continues to play an important role in sustainable nation building in the Philippines,” Udenna said.

Sought for comment, Philippine National Oil Co. (PNOC) President and Chief Executive Officer Reuben Lista said he has yet to see the agreement. PNOC is the parent firm of PNOC EC. “Wala pang dumadaan sa mother (The mother company has not received any information on this development),” he said in a text message.

In March, Mr. Uy’s oil company Phoenix Petroleum Philippines, Inc. signed a memorandum of understanding with PNOC, along with China’s CNOOC Gas and Power Group Co. Ltd., to jointly explore business opportunities in a liquefied natural gas hub project in Mabini, Batangas.

An official of Pilipinas Shell Petroleum Corp. said the group had been informed of Udenna’s proposal.

“Shell works with a wide range of partners in our various upstream projects and markets across the globe. We remain focused on operating the Malampaya natural gas facilities safely, reliably and efficiently and power the Philippines with cleaner-burning natural gas,” said the official, who asked not to be named.

Udenna’s statement came a day after PXP Energy Corp. announced that it had submitted on Nov. 11 an unsolicited proposal to the DoE for the “strategic development and utilization” of an integrated gas hub in Malampaya when SC 38 expires in 2024.

The upstream oil and gas company had also offered to acquire the 45% stake of Chevron in SC 38 through the right to match offers of the other SC 38 consortium members.