The Senate Committee on Energy will look into Royal Dutch Shell's sale of its stake in the Malampaya natural gas field off the Philippines to Udenna Corporation, its chairman said Tuesday.
Senator Sherwin Gatchalian, in a previous hearing, said the Dennis Uy-led firm had no known technical expertise to operate the multibillion-dollar deep water gas-to-power project.
"We will definitely call on the DOE (Department of Energy). In the first hearing we conducted, their statement was that they were still in the process of evaluation. It has to be very clear to the public what the criteria are and if the new company is competent based on that list," he told ANC's Headstart Tuesday.
"Government needs to assure the public that the next operator is competent and financially strong… Government through the DOE needs to evaluate if the transaction is legally, financially, and technically compliant," Gatchalian said.
Energy Secretary Alfonso Cusi said the government did not intervene in the $380 million (P18.29 billion) deal between Shell Petroleum N.V. and Malampaya Energy XP Pte. Ltd., a subsidiary
of Uy’s Udenna Corp., for the sale of a controlling stake in the Malampaya gas-to-power facility.
Shell earlier said a subsidiary of the oil and shipping firm Udenna would pay $380 million for its 45 percent operating interest in the gas field, plus up to $80 million between 2022 and 2024 "contingent on asset performance and commodity prices."
The transaction brings Udenna's total shares in Malampaya to 90 percent, having earlier bought out the 45 percent stake of US oil giant Chevron in 2019.
On Thursday, Dutch petroleum giant Shell disclosed that it signed a share purchase agreement with Uy’s Malampaya Energy for the sale of its 100 percent shareholding in Shell Philippines Exploration B.V. (SPEX), which holds a 45-percent operating interest in Service Contract 38 or the Malampaya gas field.
With the sale of Shell’s stake to Malampaya Energy, Uy’s company will now hold nearly full control of the gas field in offshore Palawan.
Before Uy's planned takeover, the Malampaya Consortium was composed of SPEX, Chevron, and the Philippine National Oil Company-Exploration Corporation, which still holds a 10-percent interest in the gas field.
“The transfer of participating interest in SC38 Malampaya Consortium is governed by the terms of the Joint Operating Agreement entered into by the members. Under the JOA, all parties must first consent to a sale of any or all participating interests,” Cusi said.
The Shell-Uy transaction, which is subject to partner and regulatory approval, is targeted to be completed by the end of 2021.
Cusi noted that once the transaction had been completed at the consortium level, it would still be submitted to the DOE for its review and approval in accordance with Presidential Decree 87, also known as the Oil Exploration and Development Act of 1972.
In a separate statement, Gatchalian urged the DOE to divulge its plans and programs on Malampaya in light of the divestment of Shell and the nearing expiration of the Malampaya project to ensure the future of its operations and the continuous supply of energy in the country.