Razón Group starts Malampaya operations

Prime Infrastructure Capital Inc., which tycoon Enrique K. Razon's group owns, is now the operator of the strategic Malampaya natural gas field.

Oil giant Shell Petroleum N.V. said it has completed the sale of 100 percent shareholding of its local uni.t Shell Philippines Exploration B.V, to Prime infra subsidiary Malampaya Energy XP Pte Ltd.

The sale effectively gave MEXP control of the 45 percent controlling stake in the Malampaya gas-to-power project through SPEX, starting 1 November. SPEX is the operating partner in the Malampaya consortium.

"Since operations began in 2002, the Malampaya gas field has supplied an important part of the Philippines' energy demand through the dedicated work of our partners and staff, past and present," Shell Upstream Director Zoe Yujnovich said in a press statement on Tuesday.

She pointed out that the sale "supports the company's strategy to create a resilient and competitive upstream portfolio."

Likewise, Yujnovich assured that the deal will not impact Shell's other businesses in the country as it will continue pursuing opportunities locally "where it can leverage its global expertise."

SPEX retains its name but will now be under the ownership of Prime Infra. The other members of the Service Contract 38 consortium are UC38 LLC, a subsidiary of Udenna Corporation which acquired the 45 percent stake of Chevron in the consortium. State-run PNOC Exploration Corporation owns the remaining 10 percent interest in the project.

Shell said the SPEX staff, which comprises the technicians that run the operation of the offshore natural gas platform will continue their employment under the new ownership.

PNOC-EC blocks Udenna

Udenna of Davao City mogul Dennis Uy offered to buy Shell's interest in Malampaya but it failed to secure the consent of PNOC-EC, which is required under the terms of the consortium agreement.

In September, the Department of Energy cleared the sale after Prime Infra was found to be technically, financially, and legally qualified to take over the natural gas facility as the new operator of Malampaya.

The transaction also acquired the consent of the joint venture partners including PNOC-EC.

"SPEX received its license to operate in the Philippines in 1990 and became the operator of Malampaya to explore and develop Service Contract 38 offshore Northwest of Palawan," Shell indicated.

"Malampaya began its commercial operations in 2002. SPEX holds the technical skills, manpower, and technology employed in day-to-day operations, providing the Philippines with domestic gas that powers a significant portion of the country's growing electricity demand," it added.

Shell maintained that the Philippines remains an important country for its operations. "Shell will continue to pursue opportunities in the Philippines where it can leverage its global expertise in line with its Powering Progress strategy," it added.