SMC eyes Shell stake in Malampaya

MANILA, Philippines — Food-to-infrastructure conglomerate San Miguel Corp. (SMC) has confirmed its interest in acquiring Shell Philippines Exploration B.V. (SPEX)’s stake in the Malampaya deep water gas-to-power project in Palawan.

“We confirm that the company is interested in acquiring the 45-percent stake of SPEX in the Malampaya gas-to-power project, as confirmed by Mr. Ramon S. Ang, president and chief operating officer of the company,” SMC told the Philippine Stock Exchange yesterday.

On Wednesday, SPEX announced that it is exploring options to divest its interest in the Malampaya project as part of its portfolio rationalization efforts.

“As part of an ongoing portfolio rationalization to simplify and increase the resilience of its business, Shell is exploring its options with a view to divest its interest in SC 38 (Malampaya),”SPEX managing director and general manager Don Paulino said in a statement.

He said Shell would ensure a smooth transition of the asset to a credible buyer who would be well placed to optimize the value from Malampaya.

“The Philippines remains an important country for Shell after over a century of successful operations and Shell will continue to pursue opportunities where it can leverage its global expertise in line with its strategy,” Paulino said.

Energy Secretary Alfonso Cusi said the sale of SPEX’s interest in Malampaya is a business strategy of the company.

“It won’t affect our gas and power supply if there will be a change in ownership,” Cusi earlier told The STAR.

In March, Udenna Corp. of Davao-based businessman Dennis Uy completed its acquisition of Chevron Philippines Ltd.’s 45 percent stake in the Malampaya project.

With the acquisition, Udenna became SPEX’s joint venture partner for the Malampaya project along with the state-owned Philippine National Oil Co.-Exploration Corp. SPEX has a 45 percent stake while PNOC-EC has a 10 percent stake in the project.

Operating since 2001, the Malampaya offshore platform and onshore gas plant are key installations to the nation’s energy security. Malampaya is the only local producer of indigenous natural gas, supplying up to 40 percent of Luzon’s electricity requirements.

Malampaya’s contract is set to expire in 2024.