Malampaya gas field

PNOC-EC withholds consent for Shell-Dennis Uy Malampaya deal

Aika Rey
PNOC-EC withholds consent for Shell-Dennis Uy Malampaya deal

MALAMPAYA. Depletion compression platform at the Malampaya gas field.

Malampaya

The buyout cannot proceed without PNOC-EC's consent. Shell says it will continue to engage with the state-owned firm and the Department of Energy.

MANILA, Philippines – In a twist of events, the Philippine National Oil Company-Exploration Corporation (PNOC-EC) withheld its consent for the sale of Shell Philippines Exploration (SPEX) to a company of businessman Dennis Uy.

During the Senate energy panel hearing on Wednesday, December 15, committee chairperson Senator Sherwin Gatchalian asked PNOC-EC about the result of its due diligence on the transaction.

“As of 13 December 2021, PNOC-EC has officially communicated [with] SPEX that PNOC-EC is withholding its consent to the transaction,” said PNOC-EC Chairperson Rozzano Briguez.

Gatchalian replied, “You’re saying that PNOC-EC will no longer give its consent to the sale of the Shell interest to Malampaya Energy, is that correct?”

“Yes, that is correct,” said Briguez later on.

In May, Shell Petroleum NV announced its $460-million deal with Udenna Corporation unit Malampaya Energy for the SPEX buyout. SPEX holds a 45% operating interest in the Malampaya gas field.

Shell needs PNOC-EC’s approval before it can proceed.

Briguez said it is now unclear if the buyout will still push through, adding that “it depends on how the operator moves forward.”

“We beg the committee’s understanding not to disclose the reasons as of the moment because our other partners and stockholders have to be informed first,” he said.

Asked for comment, Shell told Rappler that it will continue discussions with PNOC-EC and the Department of Energy (DOE) on the matter.

“Shell will continue to engage PNOC-EC and the DOE, particularly PNOC-EC on its reason/s for withholding consent to the sale,” said Shell corporate relations advocacy manager Paulo Gavino.

The parties earlier targeted the transaction to be completed by the end of 2021.

If the deal pushes through, Uy would effectively control 90% of the gas field. The remaining 10% is held by PNOC-EC.

The energy department has drawn flak for approving the buyout of Chevron Malampaya. Gatchalian accused the DOE of “bending rules” to justify the transaction, but Energy Secretary Alfonso Cusi and Udenna maintained that the deal was aboveboard.

Cusi and Uy, among others, are facing a graft complaint at the Office of the Ombudsman over the alleged anomalous buyout. – Rappler.com

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.