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MVP offers to buy Shellâs Malampaya stake
Pangilinan
STAR/File

MVP offers to buy Shell’s Malampaya stake

Danessa Rivera (The Philippine Star) - March 2, 2021 - 12:00am

MANILA, Philippines — A group led by businessman Manuel V. Pangilinan has officially made an offer to acquire the 45 percent stake of Shell Philippines Exploration B.V. (SPEX) in the Malampaya deep water gas-to-power project.

“We have submitted a final non-binding offer to Shell. Let’s see what they’ll say,” Pangilinan said in a virtual press briefing of Manila Electric Co. (Meralco) yesterday afternoon.

“Obviously, we did not follow all of the terms of reference... but since we have requested our due diligence, it covered certain things. So we made our offer. It’s up to Shell to conclude whether those terms are acceptable to them or not,” he said.

The offer was supposedly made last week as a group led by Hong Kong-based First Pacific Co. Ltd. (FPC), with Philex Mining Corp. and “one or two other banks,” Pangilinan said.

Pangilinan is the CEO and managing director of FPC, while he sits as chairman of Philex Mining.

“Actually, it’s not just First Pacific (that made an offer)… Philex Mining was part of that group that made a joint offer because Philex Mining is part owner of PXP Energy which owns 70 percent of Forum, and one or two other banks. It’s a group effort that made an offer,” he said.

He was referring to London-listed Forum Energy Plc., where upstream oil and gas firm PXP Energy has an economic interest of 77.66 percent.

Forum Energy’s principal asset is a 70 percent interest in Service Contract (SC) 72 or Recto Bank, an 8,800-square kilometer offshore petroleum license situated west of Palawan Island in the West Philippine Sea which contains the Sampaguita gas discovery. It is adjacent to the Malampaya project.

Getting a share in the Malampaya project will play a significant part if PXP Energy will encounter commercial gas discovery in SC 72.

“We hope that SC 72 will get developed into an oil field. Once we start developing, we need to connect to Malampaya because we need the facilities to process the raw gas, then pipe it to Batangas,” Pangilinan said.

In September last year, SPEX announced it is exploring options to divest its interest in the Malampaya deep water gas-to-power project as part of its portfolio rationalization efforts.

A month after, Pangilinan said his group was in talks with JP Morgan, SPEX’s adviser, to assist them in buying the 45 percent stake in Malampaya.

Other partners in the Malampaya project include Udenna Corp. of Davao-based businessman Dennis Uy, which completed its acquisition of Chevron Philippines Ltd.’s 45 percent stake in the Malampaya project in March last year.

The remaining partner owning 10 percent is state-run Philippine National Oil Co.-Exploration Corp. (PNOC-EC).

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

Malampaya’s contract is set to expire in 2024.

MANUEL V. PANGILINAN SHELL
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