Malampaya Energy can operate Malampaya

MALAMPAYA Energy XP Pte Ltd., a subsidiary of Dennis Uy-led Udenna Corp., on Monday said its war chest can cover operations of the Malampaya gas field.

“The acquisition is supported by international reputable financial institutions who saw Malampaya Energy’s capability to meet its obligations and to deliver value,” said Malampaya Energy in a statement.

“The acquisition of SPEX (Shell Philippines Exploration B.V.) is 100-percent underwritten and funded via bank loans from our existing lenders. These full facility agreements have been provided to the relevant decision makers,” it added.

SPEX sold its 45-percent participating interest in the Malampaya project to the Udenna

subsidiary. It is awaiting the Department of Energy’s (DoE) approval.

The DoE already gave its green light for Udenna unit UC38 LLC’s acquisition of Chevron Malampaya LLC’s 45-percent stake but the agency recently said it would review the deal again.

The reevaluation comes as last week’s Senate hearing quizzed Energy officials over Udenna Corp.’s takeover of the Malampaya deep water gas-to-power project, which centered on the Udenna Group’s financial health to bankroll share acquisition of the $4.5-billion natural gas facility.

During the inquiry, it was revealed that Udenna’s debt swelled by 324.2 percent over the last three years, the highest compared with other bigger conglomerates including the Ayala Group, MVP Group and SM Group.

Aside from that, the hearing noted that Malampaya Energy’s issued capital share is about 100 shares while the paid-up capital amounted to $100 (or approximately P5,000).

Malampaya Energy, however, said the company’s capitalization “is only one element of a capital structure and is not on its own a reflection of the company’s ability to fund the deals.”

“In addition, upon SPEX share sale completion, Malampaya Energy will have over P10 billion of cash. The Energy committee has unfortunately looked at a very thin slice of information and it is Malampaya Energy’s responsibility to work with DoE and PNOC-EC (PNOC Exploration Corp.) to ensure all the facts are properly presented and the financing certainty and significant cash is known,” it added.

Malampaya Energy also said that no drilling has been taken to arrest the depletion of the Malampaya field, which fuels about 21 percent of the country’s electricity requirements.

The last drilling activity, it said, occurred seven years ago.

“The country will surely be short of natural gas by 2022 and further delay will exacerbate the worsening electricity situation,” said the Udenna unit.

“Malampaya Energy is all out to rejuvenate Malampaya through a drilling campaign once the transaction is completed,” it added.