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MVP eyes Shell’s stake in Malampaya

/ 04:14 AM October 27, 2020

The Manuel Pangilinan-led group is getting another go at its proposed integrated natural gas development in the West Philippine Sea as its subsidiary PXP Energy Corp. is in talks with the Shell group on a possible acquisition of the operating stake in the Malampaya project.

The oil giant earlier this month announced plans of Shell Philippines Exploration BV, operator of the Malampaya production field, to divest its 45-percent stake in the project.

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The Department of Energy earlier turned down the MVP group’s proposal to integrate the Malampaya, under Service Contract (SC) No. 38, with their neighboring Sampaguita prospect under SC No. 72.

Based on interpretation of previous surveys made at Recto Bank, a petroleum field called Sampaguita contains 2.5 trillion cubic feet of recoverable gas.

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Such volume is comparable to that of the Malampaya deposit, which has been providing fuel to several power plants with a combined generating capacity of 3,200 megawatts.

However, integration of SCs 38 and 72 was possible if the MVP group had acquired Chevron Malampaya LLC’s 45-percent, nonoperating stake in the gas field or if they forged a partnership with the Malampaya consortium. State firm PNOC Exploration Corp. holds the remaining 10 percent.

In November 2019, Udenna Corp., led by Davao-based businessman Dennis Uy, announced the completion of the acquisition of Chevron’s interest in Malampaya.

Now that Shell is divesting from Malampaya, and the government has lifted a moratorium of petroleum exploration that halted activities in SC 72, the MVP group gets another chance.

“We are looking at it,” Pangilinan said in a virtual press briefing held Monday. “We are in talks with JP Morgan, which is advising Shell (in selling their stake in) Malampaya.”

Last month, Udenna spokesperson Raymond Zorrilla said that considering the complicated issues involved, no new player should join the Malampaya consortium — meaning that Shell should sell to the remaining partners, Udenna and PNOC-EC.

“Should Shell not consider their existing partners but put forth a decision to sell its stake to another third party, Udenna will rely on its rights as stipulated in the agreement and as a member of the consortium, such as our preemptive and consent rights,” Zorrilla said. INQ

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TAGS: Business, Malampaya
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