The Department of Energy expressed high hopes it would resolve the multi-billion peso deal involving the controlling stakes at the Malampaya deepwater gas-to-power project this year, following a signal from one of the consortiums it would consent to the transaction.
In a press briefing, Energy Secretary Raphael Perpetuo Lotilla said that the state-run PNOC-Exploration Corp., which holds the 10-percent interest in Malampaya, will likely consent to the deal before the year ends.
“The PNOC-EC is considering consenting to the sale of Shell’s interest in Malampaya. As far as the DoE is concerned, we will review this, but I can assure you that we will try to address this matter within the year,” Lotilla told reporters.
“Probably next week, I will announce the technical and financial advisors that will assist the DoE in reviewing this transaction’s technical and financial aspects. I assure you and the public that the DoE will exercise the utmost care and diligence in reviewing this,” he said.
Last month, Prime Exploration of gaming tycoon Enrique K. Razon Jr. signed a share purchase agreement acquiring MEXP Holding Pte. Ltd.
MEXP previously inked an agreement with Shell Petroleum N. V. for the 45-percent stake of SPEX in the Malampaya project. The acquisition is still subject to the consent of the PNOC-EC and the DoE.
To recall, the PNOC-EC withheld its consent to divesting SPEX’s shares.
Once the consent is given and Prime Infra assumes full ownership and control of SPEX, Prime Infra can start accelerating investments to expand the Malampaya project.
Lotilla pointed out the urgent need to address the pending Malampaya transaction to ensure that the government and the people will “take full advantage of the project.”
“We look forward to the extraction of existing resources, but we also look forward to developing other resources. We should always be forward-looking,” he said.
Lotilla already assured that the PNOC-EC “would have a complement of professional and competent advisors or consultants that would help evaluate” the transaction.
In 2019, Udenna Corp. acquired the 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.
This pending transaction was supposed to give Udenna Corp. the controlling stake at 90 percent in Malampaya or the Service Contract 38.
Despite the government assessment that both are purely business transactions, allegations of irregularities had stalled the twinning agreement worth more than $1 billion.
The Malampaya facility is the country’s only natural gas field. It provides 30 percent of the energy requirements of Luzon. The government gets 60 percent of the net proceeds from Malampaya’s petroleum operations after the contractor deducts all operating expenses.