The Department of Energy (DOE) has approved the sale of Shell’s 45% interest in the Malampaya gas-to-power project to Enrique Razon-led Prime Infrastructure Capital Inc. (Prime Infra).
“As a result of the transaction, Shell Philippines Exploration B.V. (SPEX) will become a wholly owned subsidiary of Prime Infra,” the DOE said in a statement on Monday.
The DOE approval has been conditioned on SPEX remaining to be a subsidiary of Prime Infra and on the continuing validity of Prime Infra’s commitments and undertakings to the DOE in respect of SPEX’s obligations as operator of Malampaya’s Service Contract (SC) 38.
“Prime Infra was found to be technically, financially, and legally qualified as a transferee and as successor to Shell as Operator of the Malampaya natural gas project. SPEX, as a Prime Infra subsidiary, will continue to be technically competent and financially capable to operate the Malampaya Service Contract 38,” DOE said.
The Philippine National Oil Company – Exploration Corporation (PNOC-EC) has likewise given its consent to the sale on September 22, the DOE said.
The department added that its review of the sale has considered the need “to maximize the utilization of the existing petroleum resources in Malampaya SC 38.”
“Shell has underlined to the DOE that it has decided to exit from upstream petroleum activities in the Philippines,” DOE said.
Prime Infra earlier said that it is looking to extend Malampaya’s SC 38, which will be expiring in 2024, so the firm could invest in its expansion.