Dennis Uy gets control of Malampaya after buying Shell’s 45% stake

Dennis Uy

Dennis Uy’s Udenna Corporation now controls the consortium running the Malampaya gas field in Palawan with 90% ownership after it purchased Shell Philippines Exploration B.V. (SPEX).

Udenna subsidiary Malampaya Energy XP Pte. Ltd. announced on Thursday night that it has signed a Sale and Purchase Agreement with Shell to acquire SPEX, which owns 45% of Malampaya.

Shell, in a separate announcement, said that Udenna bought SPEX for $460 million (around Php18.2 billion). A downpayment of $380 million would be given, while the remaining $80 million would be paid between 2022 and 2024.

With its dominance of the gas-to-power project, Udenna is now positioning Malampaya as “100% operated by Filipinos for Filipinos.” The government, through PNOC-Exploration Corporation, owns the remaining ten percent.

Uy edged out rival tycoon Manny V. Pangilinan for the acquisition of Malampaya. San Miguel Corporation also expressed interest, but eventually backed out.

“We are tremendously proud of Malampaya Energy for acquiring one of Shell’s most successful natural gas assets in Asia, which of course includes the world-class SPEX team currently operating Malampaya,” Uy, Udenna’s Chairman and CEO, said in a statement.

Uy was one of Pres. Rodrigo Duterte’s major financiers in the 2016 elections.

Udenna has repeatedly asserted that it would exercise its right of first refusal since SPEX announced plans to sell its share in September 2020. The Davao-based firm bought the other 45% previously owned by Chevron in March. The DOE formally approved the transaction only last April.

Though Malampaya’s gas reserves are expected to be completely depleted by the first quarter of 2027, Surigao Del Sur Rep. Johnny Pimentel had said that the big firms were after its existing gas pipes, which can be connected to their respective exploration ventures. Pangilinan confirmed this back earlier this year.

The MVP Group has existing petroleum exploration service contracts in the West Philippine Sea. Both the Uy and Pangilinan camps also submitted exploration bids to the Department of Energy (DOE) in mid-September, just days before SPEX made its announcement.

Malampaya, which has been operating since 2002, delivers a fifth of the Philippines’ growing electricity requirements and has contributed over at least $11.9 billion to the government.

“The ongoing safety and reliability of Malampaya is our top priority and will be delivered by the same experienced team of upstream professionals from SPEX working with consistent practices. They will be strongly supported by our newly established Upstream Decision Review Board of industry leaders and the ex-Chevron and ex-Shell upstream specialists in our Malampaya Energy business, who are already actively involved in managing the Malampaya consortium,” said Malampaya Energy top executive Belinda Racela.

“We are excited about the future growth opportunities at Malampaya. Our teams are accelerating exploration and production plans to extend the life of the Malampaya field and expand supplies of affordable, safe,  low-carbon and indigenous energy for the nation,” she added.

SPEX staff would continue to man the gas platform.

“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 [Shell companies in the Philippines] family in particular, and to our country in general,” Shell country chairman Cesar Romero said.

“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,” said Shell Upstream Director Wael Sawan.


Photo from Udenna website.