PNOC-EC consent takes precedent

The Department of Energy (DoE) considered it “premature” to meddle in the Razon group unit Prime Exploration Pte. Ltd.’s recent buyout of Udenna affiliate MEXP Holding Pte. Ltd. (MEXP) from Shell Philippines Exploration (SPEX) to gain operating control of the Malampaya natural gas facility.

“It would be premature for me to speak on this matter. As you know, PNOC-EC (Philippine National Oil Company-Exploration Corporation) has a 10 percent interest in the Malampaya consortium and the parties (involved in the sale) have communicated to PNOC-EC,” Energy Secretary Raphael Perpetuo Lotilla said in a press briefing on Tuesday.

PNOC-EC is state-owned Philippine National Oil Co.-Exploration Corp. which needs to give its consent to the transaction as a 10-percent Malampaya partner.

“Now, as DoE Secretary, I would be heading the agency that would also be reviewing this, from the standpoint of the DoE. While I am the chairman of the PNOC-EC, it would not be good for me to be participating in the deliberations of the PNOC-EC on this and then reviewing myself later on,” he explained.

Competent evaluation

Lotilla, however, assured that the PNOC-EC “would have a complement of professional and competent advisors or consultants that would help evaluate” the transaction.

According to Prime Exploration, the change in control of SPEX from Shell to Prime Infra is subject to the consent of PNOC-EC and the DoE.

Once the consents are given and the transition process for a safe and seamless handover of operations is completed, Prime Infra will assume full ownership and control of SPEX.

In 2019, Udenna Corp. acquired 45 percent stake of Chevron Malampaya LLC in the Malampaya project. The transaction was closed in 2020.

Last year, Malampaya Energy, a unit of Udenna Corp., acquired another 45 percent from Pilipinas Shell Exploration B.V. (SPEX).

The transactions gave Udenna Corp. the controlling stake at 90 percent in Malampaya or the Service Contract 38.

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