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SMC, PNOC vie for SPEX stake

As part of an ongoing portfolio rationalization to simplify and increase the resilience of its business, Shell is exploring its options with a view to divest its interest.

Chito Lozada

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Battle for 45 percent Malampaya stake of Shell Exploration B.V. has started. / Photograph courtesy of shell philippines

San Miguel Energy Corp., a unit of the Asian conglomerate, and the state-owned Philippine National Oil Co. (PNOC) were the initial groups floated yesterday as being interested in the 45 percent share in the Malampaya natural gas field that Shell Exploration B.V. (SPEX) is divesting.

An industry source said SMC President Ramon S. Ang is intently studying a potential bid for an estimated P28 billion value of the SPEX shares which is about the same amount that Udenna Corp. of Davao City-based magnate Dennis Uy paid for in acquiring the 45 percent stake of Chevron Corp.

Energy experts estimate that the project is still good for 97.67 petajoules of banked or unutilized gas.

Shell Philippines earlier said in a statement it is scouting for a buyer as it confirmed that it is divesting from the Malampaya project to preserve its financial footing.

The unit of oil giant Royal Dutch Shell said it is looking to “rationalize” its local portfolio, starting with its 45 percent interest and operator status in the Malampaya gas-to-power project.

“As part of an ongoing portfolio rationalization to simplify and increase the resilience of its business, Shell is exploring its options with a view to divest its interest in SC38 (Malampaya),” SPEX managing director and general manager Don Paulino said in a statement.

Fertile spot
The Malampaya facility is near the disputed West Philippine Sea, an area believed to be rich in oil deposits.

“Shell would ensure a smooth transition of the asset to a credible buyer who would be well placed to optimize the value from Malampaya,” the company said.

Businessman Manny V. Pangilinan had made a rival offer on the Chevron stake but he had yet to indicate if he will also bid for the SPEX share.

PNOC is also reviewing a possible offer but the tight fiscal situation may frustrate its plan.

PNOC president Reuben Lista said the state firm is waiting for further information regarding the SPEX divestment.

“We have data from other sources. We are studying, if it is prudent for us to get involved,” Lista said.

PNOC subsidiary PNOC Exploration Corp. (PNOC-EC), holds a 10-percent stake in the Malampaya project, which supplies fuel to power plants providing about one-fifth of electricity supply in Luzon.

PNOC-EC has right of first refusal since Udenna indicated that it will not bid for the SPEX holdings.

Raymond Zorilla, senior vice president for external affairs at Phoenix Petroleum Philippines, said Udenna will welcome whomever will replace Shell.

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