The House Committee on Appropriations has tasked the Department of Energy (DOE) to submit a copy of the share purchase agreement (SPA) signed by Shell Petroleum N.V and the Malampaya Energy XP Pte. Ltd. (MEXP) on the 45% stake of the Malampaya gas-to-power project.
In a Manila Bulletin report, Partylist Representative Arlene Brosas requested the document submission. Congress is set to evaluate whether government approvals are bypassed on divestment in the Malampaya and review the rights and obligations assigned to the buyer.
Dennis Uy-led Udenna Corporation, through MEXP, acquired Shell Philippines Exploration B.V (SPEX) in May 2021. The sale, however, was blocked by the Philippine National Oil Company-Exploration Corporation (PNOC-EC), which has a 10% stake in Malampaya.
In previous Congress hearings, Energy Undersecretary Donato Marcos said that the deal between Shell and MEXP has been “consummated” despite PNOC withholding its consent. Marcos noted that no approval was granted by the Department of Energy (DOE) on the transaction as the “red flags” raised on the sale have not been addressed.
Brosas raised concerns about why private companies in the likes of SPEX and MEXP have been loosely trading the operating stake of the Malampaya without securing government approval. The official also questioned the ‘assignment of rights’ being claimed by MEXP under the SPA.
The alleged ‘assignment of rights’ under the SPA warranted MEXP’s divestment of Malampaya’s operating stake to Prime Exploration Pte. Ltd, a unit of Enrique Razon’s Prime Infrastructure Capital Inc.
Meanwhile, Senate Committee on Energy vice chairman Sen. Sherwin Gatchalian said Shell’s divestment in the Malampaya “should be in compliance with the law to ensure the protection of consumers, the government, and the country’s energy security.”
Gatchalian noted that since PNOC-EC did not approve the sale, MEXP still does not hold the controlling interest of SPEX. Thus, Prime Infra “cannot say that it acquired a major stake in the Malampaya until MEXP gets government approval.”
Considering that the terms of the deal are unknown, Gatchalian said that the government needs to assure that the transaction is compliant with the law and regulation.