Local business tycoon Dennis Uy of Davao now controls the country’s biggest natural gas venture near Palawan.
Shell Philippines Exploration B.V. recently announced it had sold its 45% share in the Malampaya deep water gas-to-power to Uy’s Udenna Corp., which already owns 45% of the project. The last 10% belongs to state-run Philippine National Oil Corp.
The transaction is valued at $380 million with additional payments of up to $80 million between 2022 and 2024.
Shell and Udenna are expected to complete the purchase by the end of 2021. The transaction will not require approval of the Philippine Competition Commission after the Bayanihan 2 law exempts mergers and acquisitions (M&As) worth below P50 billion from regulatory review.
The deal further confirms Uy as a major player in the country’s energy sector. He also owns Phoenix Petroleum Philippines, Inc., one of the country’s largest oil companies.
Last year, antitrust regulators cleared Uy’s purchase of Chevron Malampaya LLC’s 45% share in the natural gas project which accounts for 40% of Luzon’s annual energy requirements.
The gas project has been operational since 2001. It is due for decommissioning between 2027 and 2029 after an expected decline in energy output starting 2024. Malampaya also generates revenues for both national and local governments in the form of royalties. Last year, the national government’s share, which accounts for 60% of total, reached P26.57 billion.
Shell said its exit from the project would have no impact on its local operations. Its staff in Malampaya will keep their jobs under the new ownership.