Dennis Uy, PNOC-EC explore joint bid

To acquire Shell’s stake in Malampaya

Businessman Dennis Uy has formally indicated that his company Udenna Corporation, along with state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) would be interested to acquire the 45 percent stake being unloaded by Shell Philippine Exploration B.V. (SPEX) in the multibillion dollar Malampaya gas field project.

In a statement to the media, Udenna Group Spokesman Raymond T. Zorrilla said the remaining consortium-members are seen as “the logical choice to acquire the Shell stake in order to ensure continued employment and certainty to the local workforce and as importantly to customers and stakeholders who rely on Malampaya’s continued safe and reliable operations in a manner which minimizes disruption.”

He said Uy’s company will corner the shareholdings of Shell in a joint venture with PNOC-EC so they can have a full hold of the gas field venture – even on the operations sphere of the business; and this will be done by invoking their right of first refusal in the sale process.

The remaining shareholders in Malampaya are UC Malampaya Philippines Pte. Ltd. which is a subsidiary of Udenna Corporation and a majority shareholder with 45 percent interest in the gas field; and then PNOC-EC which holds the balance of 10 percent interest.

Zorrilla emphasized their company “firmly believes that Malampaya is a high-quality asset, strategic to the future welfare and energy security of the country and welcome our partner PNOC-EC to join us in taking over the field on a 100percent basis.”

PNOC-EC’s parent firm Philippine National Oil Company (PNOC) already indicated earlier that the government has its sights set on the Shell stake that had been announced for divestment last week.

Zorrilla stressed Udenna and PNOC-EC will invoke their right as provided under the joint venture agreement that they have under the Service Contract (SC) 38 of the Malampaya field. “We will assume this right as provided in our joint venture agreement,” the Udenna executive reiterated.

He further noted “should Shell not consider their existing partners but put forth a decision to sell its stake to another third party, Udenna will rely on its rights as stipulated in the agreement and as a member of the consortium, such as our preemptive and consent rights.”

It was also Udenna which purchased the 45 percent share of American energy giant Chevron in the Malampaya project in a transaction that was sealed in March this year. Following Shell’s sale plan announcement, Udenna stipulated that it will “work together with its other partner PNOC-EC to ensure the ongoing reliable and safe operations of the asset.”

The contract of the Malampaya field is due to expire in 2024, but the SC 38 consortium currently has pending application for license extension with the Department of Energy (DOE). Once extended, the production life cycle of the field is seen extendible for another 6-7 years.