Shell said that it has exercised “careful consideration” in deciding to sell its 45% share in the Malampaya gas-to-power project to Dennis Uy’s Udenna Corporation nearly two weeks ago.
In a report by BusinessWorld, Shell emphasized its decision to sell its stake was part of its efforts to rationalize its global portfolio, so that it can simplify and increase its business resiliency. Shell, a British-Dutch firm, intends to concentrate its upstream business on nine “core” areas. Energy information provider S&P Global Platts identified these as “Brazil, Brunei, Gulf of Mexico, Kazakhstan, Malaysia, Nigeria, Oman, Permian, and UK North Sea.”
The $460-million deal covers the two gas platforms within the Service 38 block in the West Philippine Sea, subsea wells and flow lines, its 504-kilometer undersea gas pipe, and its onshore gas plant and pipeline in Batangas City.
Nonetheless, Shell said that it would continue to pursue opportunities in the Philippines.
The transaction, which gave Udenna 90% ownership of Malampaya, is still up for the Department of Energy’s review, particularly if the Uy-led firm has the technical and financial capability to run the project. The Philippine National Oil Company owns the remaining ten percent.
Malampaya has been commercially operating since 2002 and to-date has provided a fifth of the country’s power needs. Its reserves are seen to be completely depleted by early 2027.
