Dennis Uy cedes Malampaya stake to Razon firm

Tycoon Enrique Razon Jr. is set to assume a major stake in the Malampaya deep water gas-to-power project in offshore Palawan by the end of the year after taking over a unit led by Davao-based businessman Dennis Uy.

Razon-led Prime Infrastructure Capital Inc. (Prime Infra) announced that its subsidiary Prime Exploration Pte. Ltd. had signed a share purchase agreement to acquire MEXP Holding Pte. Ltd. (MEXP), a unit of Uy’s Udenna Corp.

MEXP was the entity that was given first dibs in Shell Philippines Exploration B.V.’s (SPEX) 45-percent participating interest in Service Contract 38 that covers the Malampaya project. That acquisition, however, was hampered after state-run Philippine National Oil Co.-Exploration Corp. (PNOC-EC), which holds a 10-percent interest in Malampaya, withheld its consent to the $460-million sale.

UC38 LLC, another Udenna unit, holds the other 45-percent stake after Chevron Corp. left the consortium in a $565-million transaction.

Prime Infra did not disclose the amount to be paid for assuming full ownership and control of SPEX, but Shell said the transaction should be finished before the end of the year.

“Shell is working closely with both MEXP and Prime Infra to ensure the change of ownership will not unduly disrupt the transition process and continue to work with PNOC EC and [Department of Energy] to complete the deal by [the fourth quarter of 2022],” Shell said.

The PNOC-EC and Department of Energy (DOE) have to give their consent to the SPEX takeover. “Once such consents are given and the transition process for a safe and seamless handover of operations is completed, Prime Infra will assume full ownership and control of SPEX,” said Prime Infra.

Even with the transfer of ownership from Udenna to Prime, “the terms and conditions which Shell has sold SPEX to MEXP have not changed,” Shell added.

Ports and gaming billionaire Razon announced last month its intention to acquire a controlling stake in the Malampaya project, among the Philippines’ most important power assets, as it provides about 20 percent of the country’s total electricity requirements.

Malampaya operations commenced in 2001 and the license covering the project will lapse in 2024. The DOE earlier said the gas field’s reserves were expected to be commercially depleted by 2027.

Razon, who chairs Prime Infra, said their entry into the natural gas arena reflected their commitment to helping the country maintain energy security and independence.

The development also comes amid financial issues besetting Udenna. The latter moved this week to settle its debts in relation to a Clark project following a default notice from a consortium of banks led by BDO Unibank.

Back in May, Razon’s Bloomberry Resorts Corp. also unveiled plans to invest in Uy’s casino developments in Cebu and Pampanga.  Jordeene B. Lagare