MANILA, Philippines – Enrique Razon Jr.-led Prime Infrastructure Holdings (Prime Infra) is set to acquire a controlling stake in the operations of the Malampaya gas field, currently held by businessman Dennis Uy.

In a statement on Thursday, June 2, Prime Infra said the acquisition process has already kicked off, subject to the consent of the Department of Energy (DOE) and the Philippine National Oil Company-Exploration Corporation (PNOC-EC).

Uy, who holds a 90% operating stake in Malampaya, had acquired his stake through separate deals with Chevron and Shell for approximately $1 billion.

Prime Infra will be taking over the Shell side of Malampaya sold to Uy. PNOC-EC, however, earlier withdrew its consent to the deal between Shell and Uy’s Udenna Corporation.

Back in February, Shell said the deal with Udenna was “still active” despite the PNOC-EC action.

Shell earlier announced that the base consideration for the deal was at $380 million, with additional payments of up to $80 million between 2022 and 2024.

“Natural gas is a critical transition fuel and the modern, state-of-the-art infrastructure built to harness this valuable transition fuel attracted us to pursue this deal – all aspects of the project tick off our environmental, social, and governance checklist that will allow us to contribute more to the country’s transition from expensive and volatile coal and imported fuel prices to affordable cleaner and domestic energy resources like natural gas,” said Razon, chairman of Prime Infra.

Razon said Prime Infra will “sustain” the development and production of domestic gas as long as the license and natural resources permit.

“Also, there is a sense of ownership to achieving national energy independence when you bring in Filipino companies to handle the reins of a critical power infrastructure and this is what Prime Infra aims to do with our participation in Malampaya,” he said.

Udenna said it is “optimistic” about the participation of the Razon group in Malampaya.

“We look forward to this opportunity to partner with Prime Infrastructure and PNOC-EC, as we explore more ways to fulfill our common vision to make Malampaya sustain its capability to meet the urgent energy security need of the Philippines,” said Uy, Udenna chairman and chief executive officer.

Uy, earlier rumored to sell his businesses, reacted to a Reuters report by saying that Udenna’s investment philosophy has always been about “maximizing shareholder value through partnerships.”

Uy has seen his empire rapidly grow during the administration of President Rodrigo Duterte. Uy is a close friend of the President and was among his top campaign contributors during the 2016 elections.

The Senate energy committee found during the course of its investigation into the Malampaya buyout deal that the DOE “violated laws” to accommodate the sale to Uy.

The issue was that Udenna’s UC Malampaya, later renamed UC38, had a negative working capital at the time of the DOE evaluation.

The energy department has repeatedly denied allegations of irregularities.

The Malampaya gas-to-power project is among the Philippines’ most valuable natural resources, supplying natural gas to five power plants with a total capacity of 3,211 megawatts. The gas field is expected to be drained by 2027. – Rappler.com