Chevron Corporation is formally seeking ‘right of first refusal’ from energy partners Shell Philippines Exploration B.V. (SPEX) and Philippine National Oil Company-Exploration Corporation (PNOC-EC) following the buyout offer presented by the Udenna Corporation to the Malampaya gas-to-power project.
According to a Manila Bulletin report, it was disclosed that the official correspondence sent by Chevron informed energy partners of the “enticing offer” made by Udenna.
PNOC-EC stated in the report that “Chevron made calculations on how much more it could earn from the Malampaya project in the remaining four years of the production contract; and when it crunched the numbers, the offer of Udenna would be a viable one so it is inclined to the sale option.”
SPEX also confirmed in the report that it “received advice from our Chevron on its decision to sell its interest in the Malampaya project, but it qualified that our focus remains on operating the Malampaya natural gas facilities safely, reliably and efficiently to ensure we keep powering the Philippines with cleaner-burning, domestic, natural gas.”
According to the joint operating agreement (JOA) signed by the parties, it was noted that they can exercise their right of first refusal in case any of the interest-holders decided to sell their stake in the project.
At present, SPEX and Chevron holds the majority stake, accounting to 45 percent each.
In related news, it was reported that Chevron’s exit in the upstream oil and gas sector in Southeast Asia might be warranted after losing a deal that it has been eyeing in Indonesia. It was also reported that it might do the said in another market in the region.
Chevron’s targeted exit in the local industry, however, was reportedly anchored on uncertainties surrounding the Malampaya consortium’s application for license extension that is still with the Department of Energy (DOE).