Tycoon Enrique Razon Jr. is set to acquire a major stake in the Malampaya deepwater gas project off Palawan by the end of the year after taking over a unit run by the based businessman in Davao Dennis Uy.
Prime Infrastructure Capital Inc. (Prime Infra), led by Razon, announced that its subsidiary Prime Exploration Pte. ltd. had signed a share purchase agreement to acquire MEXP Holding Pte. ltd. (MEXP), a unit of Uy’s Udenna Corp.
MEXP is the entity that received the first stake in Shell Philippines Exploration BV’s (SPEX) 45% interest in Service Contract 38 which covers the Malampaya Project. This acquisition, however, was hampered after state-owned Philippine National Oil Co.-Exploration Corp. (PNOC-EC), which owns a 10% stake in Malampaya, withheld consent to the $460 million sale.
UC38 LLC, another unit of Udenna, owns the other 45% stake after Chevron Corp. left the consortium in a $565 million transaction.
Prime Infra did not disclose the amount to be paid to assume full ownership and control of SPEX, but Shell said the transaction is expected to be completed before the end of the year.
“Shell is working closely with MEXP and Prime Infra to ensure that the change in ownership will not unduly disrupt the transition process and will continue to work with PNOC EC and [Department of Energy] close the deal in [the fourth quarter of 2022]”Shell said.
The PNOC-EC and the Department of Energy (DOE) must give their consent to the takeover of SPEX. “Once these consents have been given and the transition process for a safe and transparent transfer of operations is completed, Prime Infra will assume full ownership and control of SPEX,” Prime Infra said.
Even with the transfer of ownership from Udenna to Prime, “the terms and conditions under which Shell sold SPEX to MEXP have not changed”, Shell added.
Ports and gaming billionaire Razon last month announced plans to acquire a majority stake in the Malampaya project, one of the Philippines’ most important energy assets, as it supplies around 20% of the country’s total electricity needs. country.
Malampaya operations began in 2001 and the license covering the project will expire in 2024. The DOE said earlier that the gas field’s reserves are expected to be commercially depleted by 2027.
Razon, who chairs Prime Infra, said their entry into the natural gas arena reflects their commitment to helping the country maintain its energy security and independence.
The development also comes amid financial troubles that beset Udenna. The latter moved this week to settle its debts related to a Clark project following a formal notice from a consortium of banks led by BDO Unibank.
In May, Bloomberry Resorts Corp. de Razon also disclosed plans to invest in the development of Uy’s casinos in Cebu and Pampanga. Jordeene B. Lagare
To subscribe to MORE APPLICANT to access The Philippine Daily Inquirer and over 70 titles, share up to 5 gadgets, listen to news, download as early as 4am and share articles on social media. Call 896 6000.