Government eyes bigger stake in Malampaya

MANILA, Philippines — The government is increasing its stake in the Malampaya deep water gas-to-power project by exercising its right to match the offer of Dennis Uy’s Udenna Corp., Energy Secretary Alfonso Cusi said.

The board of Philippine National Oil Co.-Exploration Corp. (PNOC-EC) has cleared the state-run firm to exercise its right to match Udenna’s purchase of 45 percent of Chevron Malampaya LLC.

“The board approved it already so PNOC-EC is exercising its right,” Cusi said.

Cusi, who also sits as ex-officio chairman of PNOC-EC, said the state-run firm would match Udenna’s offer equivalent to its existing 10 percent interest in Malampaya.

“We are getting the 10 percent of the share of Chevron [sold to Udenna],” he said.

The PNOC-EC board will further discuss its next steps in a regular board meeting to be held tomorrow.

Udenna, the holding company of Uy, announced last month that it acquired Chevron Philippines Ltd.’s 45 percent stake in the $4.5-billion Malampaya project.

Udenna subsidiary UC Malampaya Philippines Pte. Ltd. bought 100 percent of the shares of Chevron Malampaya LLC, which holds Chevron Philippines’ non-operated interest in Malampaya.

The Malampaya project is PNOC-EC’s largest project to-date. Prior the transaction, its partners include Shell Philippines Exploration B.V. (SPEX), a local unit of energy giant Royal Dutch Shell with 45 percent and Chevron Malampaya LLC with another 45 percent.

It is also the country’s most successful petroleum service contracts of 23 active projects. As the largest natural gas industrial project in the Philippines, it recovered all costs in four years.

The Malampaya gas project supplies fuel to around 40 percent of gas-fired plants in Luzon with over 3,000 MW in capacity.

While the contract will end in 2024, supply from the Malampaya gas field is projected to be depleted by early 2022 or latest by 2027.