Shell to have 6-month Malampaya handover timeline


Since a non-technical buyer is expected to take over the Malampaya gas-to-power project, Shell Philippines Exploration B.V. (SPEX) said that will undergo a “six-month transition operation” on the platform as part of its handover to Udenna Group subsidiary Malampaya Energy XP Pte. Ltd. (MEXP).

SPEX Managing Director and General Manager Don Paulino, in a Manila Bulletin report, said that Shell’s Singapore-based deal team and MEXP are set to discuss a possible technical services agreement. Under its possible terms, SPEX would still operate Malampaya temporarily, while Udenna learns the ropes and gets a better grasp of running the asset.

Udenna announced in May that it bought SPEX from Shell, which owns 45% of Malampaya. The Dennis Uy-led firm, which already owns the other 45% after purchasing it from Chevron in 2020, would have control of the gas platform if its deal with Shell gets government approval.

The Department of Energy is currently reviewing the Shell-Udenna deal, while the Senate is probing both Udenna transactions.

Paulino said the agreement is SPEX parent firm Royal Dutch Shell’s way of supporting the transition. He qualified, however, that the operation transition is what SPEX ought to extend. The transition period is expected to begin either in November or December.

The transition of operations to a smaller firm like Udenna is not new to Shell, Paulino pointed out, emphasizing that the multinational oil giant’s experience in such dealings had been generally positive.

In the divestment of SPEX’s stake in Malampaya gas field project, Paulino noted that part of the evaluation carried out by their deal team was MEXP’s technical capacity to take over the gas field’s operations.

MEXP, he said, submitted a three-tiered transition plan on how it can acquire and re-calibrate the skill set of its organization on how it would continue operating the gas facility.

The short-term plan is that MEXP would retain current SPEX personnel, while also considering outsourcing some elements of its operations by contracting technical pool people and consultants who are well-experienced in upstream exploration, development and operations, including drilling part. The longer term plan, meanwhile, will be to fully equip the company’s technical expertise by recruiting highly experienced talents into its organization.