The Department of Energy (DOE) will review the acquisition of Shell Philippines Exploration (SPEX) by Malampaya Energy, a subsidiary of Dennis Uy’s Udenna Corporation.
SPEX holds a 45% operating interest in the Malampaya gas field.
In a statement on Monday, May 24, Energy Secretary Alfonso Cusi said the DOE review will follow after the transaction has been completed at the consortium level.
Shell said last Thursday, May 20, that the transaction would be completed by the end of 2021, subject to partner and regulatory consent. With the acquisition, Uy will have a 90% operating interest in Malampaya, while the remaining 10% is held by the Philippine National Oil Company.
“[O]nce the transaction has been completed at the consortium level, it will still be submitted to the DOE for its review and approval in accordance with Presidential Decree No. 87 (PD 87) otherwise known as the Oil Exploration and Development Act of 1972,” said Cusi.
He gave assurances that the department will thoroughly evaluate the deal.
“The DOE will, accordingly and judiciously, evaluate the legal, financial, and technical aspects of the transaction, and its impact to the obligations of [the] consortium to the Philippine government according to the terms of SC 38 (Service Contract 38) and PD 87,” the energy chief added.
SC 38 or the Malampaya gas-to-power project is set to expire in 2024. The Philippine government has yet to announce whether the license would be extended.
While reserves at the Malampaya gas field are projected to last only until 2027, a platform installed there has the capability to process raw gas.
Senator Sherwin Gatchalian, Senate energy panel chair, urged the DOE to release its plans on Malampaya given the recent turn of events. An inquiry into the sale will be conducted by the panel, said Gatchalian. – Rappler.com