Capital

Dennis Uy's Udenna Corp, Which Already Owns 45% of Malampaya, Now Wants All of It

If the deal pushes through, Udenna would own the source of 30% of the country's power.
IMAGE Udenna Corp. / Shell
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Tycoon Dennis Uy is in the headlines once more, this time for Udenna Corporation’s expressed interest to secure Shell’s 45 percent stake in the Malampaya gas field. Udenna Corp. already owns 45 percent of Malampaya, while the government, through the state-owned Philippine National Oil Company Exploration Corporation (PNOC-EC), owns the remaining 10 percent.

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After Shell expressed its interest to divest its 45 percent interest in the deep water gas-to-power project, Udenna expressed its interest to acquire Shell’s shares, which would bump up Udenna’s stake to a whopping 90 percent should the acquisition push through.

The Malampaya gas field is one of the most important energy projects in the country, supplying an estimated 30 percent of energy in the Philippines. The gas field began as a private-public project between the government and Shell in 2001, and the contract is set to expire on 2024, by which the gas field will be turned over to the government. Udenna is the new player on the playing field after acquiring the 45 percent stake of Chevron Malampaya LLC, which exited the consortium in March, 2020.

In a statement, Udenna expressed its interest to acquire Shell’s divested stake, as by right since Udenna is already an existing member of the consortium, adding that it is the “logical” choice. The group argued that bringing in a new consortium member would be a complicated process that would take time to evaluate.

“The Udenna Group firmly believes that Malampaya is a high-quality asset, strategic to the future welfare and energy security of the country and welcome our partner PNOC Exploration Corporation to join us in taking over the field on a 100 percent basis,” said Atty. Raymond Zorilla, spokesperson for Udenna Group.

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“We, together with PNOC-EC, are the most suitable party to assume Shell’s interest. We will exercise this right as provided in our joint venture agreement…Should Shell not consider their existing partners but put forth a decision to sell its stake to another third party, Udenna will rely on its rights as stipulated in the agreement and as a member of the consortium, such as pre-emptive and consent rights.”

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Anri Ichimura
Section Editor, Esquire Philippines
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