San Miguel also formally offers to buy Shell’s Malampaya stake

Following the recent announcement of business tycoon Manny V. Pangilinan, San Miguel Corporation’s (SMC) Ramon Ang said that his conglomerate has also made a formal offer to Shell Philippines Exploration B.V. (SPEX) to purchase its 45% stake in the Malampaya gas-to-power project.

In a report by BusinessMirror, Ang said that SMC likewise gave a non-binding offer to SPEX, which operates the gas platform.

Last week, Pangilinan said that First Pacific and PXP Energy offered to Shell its non-binding offer. PXP Energy, through London-listed Forum Energy Ltd., operates Service Contract (SC) 72 in the Recto Bank near Malampaya in the West Philippine Sea.

Both the MVP Group and SMC have the financial capabilities to purchase Shell’s share in SC38, which covers the Malampaya project. However, Udenna Corporation is expected to exercise the right of first refusal as the owner of the other 45%.

The Dennis Uy-led firm bought its share in Malampaya from Chevron for $65 million last year, but the Department of Energy (DOE) has yet to approve the deal. The DOE previously said it sees no violations with the transaction. Uy was one of Pres. Rodrigo Duterte’s largest campaign contributors in the 2016 elections.

Sen. Sherwin Gatchalian, who chairs the Senate Committee on Energy, has raised on questions on how Udenna would be able to handle Malampaya when it hasn’t proven any technical capability.

SC38 will be expiring in 2024, while Malampaya’s reserves are expected to be depleted between 2024 and 2027. Surigao Del Sur Rep. Johnny Pimentel and Energy Sec. Alfonso Cusi have said that Malampaya’s buyers are interested in its undersea pipes, which Pangilinan himself confirmed.

SPEX is selling its stake in Malampaya as part of Shell’s strategy to ensure the sustainability of its businesses in the Philippines.

Photo from SMC/Tatler Philippines website.