Despite businessman Dennis Uy’s Udenna Corp.’s buy out of all the shares of its consortium partner Chevron Malampaya LLC, Shell Philippines said Thursday it would remain the operator of the Malampaya gas field in offshore Palawan.
Under the joint deal for the Malampaya consortium, Pilipinas Shell communications manager Cesar Abaricia said Shell Philippines Exploration BV (SPEx) is still the operator of the gas field.
“The contract stated that we are still the operator of the Malampaya (gas field),” Abaricia told reporters on the sidelines of Pilipinas Shell’s press conference on its campaign against malaria in Taguig City.
Abaricia said Uy’s buyout of its partner Chevron in Malampaya consortium will not have any material impact on the operations of the gas-to-power facility since expertise is still with Shell.
“We are just the operator of Malampaya, we cannot do anything with the shares of the consortium that were already sold,” he explained, adding that Shell has no power over the buyout decision.
Chevron sells out
In October last year, Udenna Corp. signed a sale and purchase agreement to acquire 100 percent of the shares of Chevron Malampaya LLC, which holds a 45 percent interest in Malampaya.
SPEx also holds a 45 percent stake in the Malampaya consortium, while the remaining 10 percent belongs to state-owned Philippine National Oil Company-Exploration Corp.
In December last year, the Philippine Competition Commission (PCC) said Udenna’s Chevron buyout has been notified but it will review the deal once all documents needed are complete.
Under the Philippine Competition Act, the PCC is mandated to review mergers and acquisitions with an aggregate value of P2.2 billion or higher to ensure that anti-competitive practices are eliminated.
Enough power until 2024
The Malampaya gas-to-power facility fuels three gas-fired power plants with a total generating capacity of 2,700 megawatts (MW). It provides up to 30 percent of the power generation needs of Luzon.
Connected to onshore gas plants in Batangas, the Malampaya offshore facility in Northern Palawan was inaugurated in 2001.
Estimates showed the Malampaya gas field reserves are sufficient until 2022 to 2024.
However, the Department of Energy (DoE) recently pointed out that if the Malampaya gas field runs out, massive brownouts in Luzon may happen without alternative power sources.
To address the potential energy insecurity, the Philippine Petroleum Association of the Upstream (Oil and Gas) Industry (PAP) was mandated to work closely with the government agencies to revitalize oil and gas explorations.
The DoE noted that the Philippines is still underexplored that even in Palawan, where oil and gas fields are also located, new prospects have already been delineated for drilling and exploration.