Shell sells Malampaya stake to Udenna

MANILA, Philippines — Royal Dutch Shell has divested in the Malampaya deep water gas-to-power project after selling its stake to a unit of Udenna Corp. of Davao-based businessman Dennis Uy, which now owns 90 percent of the country’s major gas field.

In a statement, Shell Petroleum N.V. said it has signed an agreement with Malampaya Energy XP Pte Ltd., a subsidiary of Udenna, for the sale of its 100 percent shareholding in Shell Philippines Exploration B.V. (SPEX).

SPEX holds a 45 percent operating interest in Service Contract (SC) 38, which includes the Malampaya gas field.

The transaction amounts to $380 million, with additional payments of up to $80 million between 2022 and 2024 contingent on asset performance and commodity prices.

Shell expects to complete the transaction by end-2021, subject to partner and regulatory consent.

Shell’s upstream director Wael Sawan said the announcement is “consistent with Shell’s efforts to shift our upstream portfolio to one that is focused on nine core positions.”

“Since it began commercial operations in 2002, Malampaya has supplied a significant portion of the Philippines’ energy demand and it will continue powering the country with indigenous gas following a safe transition of the asset and its experienced workforce,” he 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.

The other partners in SC 38 are UC38 LLC, a subsidiary of Udenna Corp. with 45 percent, and Philippine National Oil Co. – Exploration Corp. with 10 percent.

Following the sale, Shell said SPEX staff will continue their employment under the new ownership, providing continuity and contributing to ongoing operational reliability and safety.

It said Malampaya and its staff have made significant contributions to the Philippines and to the local community over the past two decades and are expected to continue playing an important role in providing energy for the country.

“Shell and the country leadership will always be grateful for the dedication, professionalism, and support that the entire SPEX organization has contributed to the wider SciP family in particular, and to our country in general,” Shell companies in the Philippines country chairman Cesar Romero said.

Shell clarified that the deal has no impact on other Shell businesses in the country, noting that the Philippines remains an important country for Shell after over a century of successful operations.

The firm said Shell will continue to pursue opportunities in the Philippines where it can leverage its global expertise in line with its strategy.