Connect with us

Hi, what are you looking for?


Transparency sought in Malampaya stake sale

The Energy department should be transparent in its review of the sale by Shell Philippines Exploration B.V. (SPEx) of its entire stake in the Malampaya deepwater gas-to-power project to a subsidiary of Dennis A. Uy’s Udenna Corp., a lawmaker said.

Senator Sherwin T. Gatchalian said in a statement on Friday that the sale of SPEx’s stake to Udenna unit Malampaya Energy XP Pte. Ltd. should be made clear to the public.

In May, SPEx announced that it had signed an agreement for the sale of 100% of its shareholdings in the project to Malampaya Energy XP. The deal comes after SPEx said in September last year that it was selling the stake.

“This is no ordinary asset. What are the sets of criteria that they will use in evaluating this transaction? It has to be very clear to the public,” said Mr. Gatchalian, who heads the Senate’s energy committee.

SPEx holds 45% interest in Service Contract (SC) 38, which covers the Malampaya gas field. The base consideration of the SPEx sale is $380 million, with additional payments of up to $80 million from 2022 to 2024 depending on asset performance and commodity prices.

The other firms with interest in SC 38 are UC38 LLC, another Udenna subsidiary, owning 45%; and Philippine National Oil Co.-Exploration Corp. with 10%. UC38 acquired its stake in March last year from Chevron Malampaya LLC.

Energy Secretary Alfonso G. Cusi said in a recent television interview that his department was still evaluating the transaction and that no decision had been finalized.

Mr. Cusi also said that the deal is a private business transaction but must first meet government requirements before receiving the stamp of approval from the Department of Energy (DoE).

“That one has been submitted to us, and we are evaluating the financial, technical

capability of the transaction. It’s in process actually right now, so we have no decision on that [yet],” Mr. Cusi said.

Mr. Gatchalian said that the government should examine the transaction, adding that the DoE should certify that it is legal and “that the new operator is financially and technically competent and has the capability of running Malampaya and supplying electricity to our homes.”

SPEx is the operator of the offshore Palawan project under SC 38, which will expire in 2024. The gas field’s reserves is said to last beyond that year.

“Whoever steps in to take the place of Shell will supply gas to our homes. Malampaya gas project powers about one in every five homes in Luzon. It’s important that we keep our lights on, that we have a constant supply of gas and in order to do that, we need to have very competent and financially strong operators,” Mr. Gatchalian said.

The lawmaker made a similar call in May after SPEx announced its agreement with the group of Davao City businessman Mr. Uy.

Mr. Gatchalian previously described the Malampaya project as the Philippines’ most significant oil and gas upstream development, which supplied 19.16% of the country’s electricity requirement for 2020.

He also said the project had contributed around P261.68 billion to the national government since the start of its commercial operation in 2002 until 2019.

BusinessWorld sought the comment of the DoE regarding Mr. Gatchalian’s statement but it has not issued a response as of deadline time. — Revin Mikhael D. Ochave

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



The UK government will invest £100m in Britishvolt as the car battery manufacturing startup seeks to build Britain’s first large-scale “gigafactory” in the north-east...


Bankers and accountants are among those being summoned back to their offices after the government scrapped its work-from-home guidance in England with immediate effect....


The kitchens of Michelin-starred restaurants too often descend into alternative “moral universes” where bullies and bad behaviour thrive, a study has suggested. While Gordon...


A company controlled by the Duke of York and used to manage his investments is more than £200,000 in debt, according to newly filed...


Rogue waste collectors who fly-tip household rubbish will be targeted under a government crackdown. Fly-tipping increased sharply last year to 1.1 million cases in...


Peloton Interactive lost more than 25 per cent of its value on Wall Street at one point last night after the exercise bike maker...

You May Also Like


Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...


Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...


Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...


As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.