Lotilla: Malampaya deal to be resolved this year

MANILA, Philippines — The Department of Energy (DOE) has given its assurance that a decision on the Malampaya stake sale will be made within the year.

Energy Secretary Raphael Lotilla yesterday said state-run PNOC Exploration Corp. (PNOC-EC) is considering giving its consent to the sale of Shell Philippines Exploration B.V. (SPEX)’s stake in the Malampaya deep-water gas-to-power project to MEXP Pte. Ltd., a company previously owned by Udenna Corp. of Davao businessman Dennis Uy that was sold to Enrique Razon’s Prime Infrastructure Capital Inc.

“These are among the things that are being addressed right now.  PNOC Exploration Corp. is considering the matter of giving its consent to the sale of Shell’s interest,” Lotilla said in a virtual briefing yesterday.

PNOC-EC, with its 10 percent stake in the Malampaya project, will have to give its consent on the deal first.

Lotilla earlier said he would defer to PNOC-EC acting president and CEO Franz Josef Alvarez the task of reviewing the sale of SPEX’s stake.

According to Lotilla, the DOE will be tapping technical and financial advisors to assist the agency in reviewing the proposed sale.

“I just want to assure you and the public that the Department of Energy will exercise the utmost care and diligence in reviewing these proposals,” he said.

“The main objective is to ensure that the Philippine government and the Filipino people will be able to take full advantage of this resource and that within the framework of Presidential Decree 87, we look forward not only to the extraction of the existing resource, but that we also look to the full development of the other oil and gas resources of the country. We should always be forward looking and that’s the framework that we are using,” Lotilla said.

One of the country’s most important power assets, Malampaya produces natural gas to power plants in Batangas City that account for around 20 percent of the country’s total electricity requirements.

It began operations in 2001, with the consortium’s license for the project set to expire in 2024.

Last July, Prime Infrastructure subsidiary Prime Exploration Pte. Ltd. signed a share purchase agreement acquiring MEXP from Udenna.

MEXP previously inked an agreement with Shell Petroleum N.V. for the 45-percent stake of SPEX in the Malampaya project.

Prime Infra earlier said that once the consents from the PNOC-EC and the DOE are given and the transition process for a safe and seamless handover of operations are completed, the company would assume full ownership and control of SPEX.

The company’s investment in the expansion of Malampaya operations will also be critical to provide the necessary infrastructure that will support the development of natural gas in the area, one of the key points defined in the administration’s energy agenda.