Udenna group commits to ‘rejuvenate’ Malampaya project

The Udenna group led by Davao City-based businessman Dennis Uy intends to “rejuvenate” the Malampaya gas project through a “drilling campaign” once their acquisition of the 45-percent operating stake from Shell is completed later this year.

In a statement, Malampaya Energy XP Pte Ltd.—the Udenna subsidiary that acquired Shell Philippines Exploration BV or Spex—noted that no drilling has been done at the Malampaya gas field over the past seven years, even as the project’s output has been declining.

As operator of Malampaya, Spex and its partners Chevron and PNOC Exploration Corp. faced tax disputes with the government and apparent disinterest in renewing the concession, which will lapse in 2024.

“Malampaya Energy is all out to rejuvenate Malampaya through a drilling campaign once the transaction is completed,” the Udenna unit said.

When the transition of operatorship has been completed, which Udenna and Spex told the Senate energy committee they expect within this year, Udenna would solidify their 90-percent interest in the project.

The Department of Energy (DOE) has recently cleared Udenna’s previous acquisition—through subsidiary UC38 LLC—of Chevron’s 45-percent nonoperating stake in Malampaya. The government through PNOC-EC holds the remaining 10 percent.

Energy Secretary Alfonso Cusi said the DOE was still evaluating the Udenna-Shell transaction. Cusi also said last week that the Udenna-Chevron transaction was approved based on the documents submitted by Udenna.

In a letter dated July 14 addressed to Sen. Sherwin Gatchalian, the DOE said that based on UC38 LLC’s unaudited financial statements as of September 2020, which stated available working capital at $177.4 million, the company “appeared to meet its commitment of $64.4 million for 2020.” INQ