Senate energy committee chairman Sherwin Gatchalian has urged the Department of Energy (DOE) to be transparent in its review of the Udenna Group’s purchase of the 45% stake of Shell Philippines Exploration B.V. (SPEX) in the Malampaya gas-to-power project in May.
This comes as Energy Sec. Alfonso Cusi said last week that SPEX’s purchase by Udenna subsidiary Malampaya Energy XP transaction is not yet final, as the DOE is still evaluating the Dennis Uy-led firm’s financial and technical capabilities to run the consortium. With financing reportedly coming from four foreign banks, Udenna is purchasing SPEX for $460 million.
“This is no ordinary asset. What are the sets of criteria that they will use in evaluating this transaction? It has to be very clear to the public,” Gatchalian said in a statement.
Udenna would have control of Malampaya with a 90% total stake once the DOE approves the Shell-Udenna transaction.
Gatchalian, in mid-April, also sought justification from the DOE on its decision to give the green light on the transfer of Chevron’s 45% interest in the Malampaya project to UC Malampaya Philippines, another Udenna unit. Udenna bought Chevron’s stake for $565 million in March 2020.
The senator underscored the significance in acquiring Shell’s stake as the company not only holds a 45% share but also the operator functions of the Malampaya consortium’s Service Contract 38.
“Whoever steps in to take the place of Shell will supply gas to our homes. Malampaya gas project powers about one in every five homes in Luzon. It’s important that we keep our lights on, that we have a constant supply of gas and in order to do that, we need to have very competent and financially strong operators,” Gatchalian emphasized.
“The government, through the DOE, needs to evaluate the transaction and ensure that it’s legal and that the new operator is financially and technically competent and has the capability of running Malampaya and supplying electricity to our homes,” he added.