PCC clears Udenna unit’s bid for Chevron Malampaya stake

By Lenie Lectura -February 26, 2020
from Business Mirror

UC Malampaya Philippines Pte. Ltd., a unit of Udenna Corp. (UC) led by Davao businessman Dennis Uy, has secured approval of the Philippine Competition Commission (PCC) to acquire the 45-percent stake of Chevron Malampaya Llc. in the Malampaya deepwater gas-to-power project.

“Upon review of the findings and recommendations of the Mergers and Acquisitions’ Office and the Parties’ submissions, the Commission finds that the acquisition by UC Malampaya of shares in Chevron Malampaya will not likely result in substantial lessening of competition,” said the PCC, adding that “there are no horizontal or vertical relationships between the Parties.”

The January 22 decision of the PCC also stated that it takes “no further action with respect to the proposed transaction between UC Malampaya and Chevron Malampaya.”

UC Malampaya signed on October 25, 2019, a sale and purchase agreement to acquire Chevron’s entire stake in the gas project that is being maintained and operated by a consortium led by Shell Philippines Exploration B.V. (SPEx), with 45 percent. State-led Philippine National Oil Co. Exploration Corp. (PNOC-EC) holds the remaining 10 percent.

The consortium members were awarded Service Contract 38, allowing them to explore and develop an area in Northwest Palawan, Philippines.

“The signing of the share purchase agreement marks an important milestone in the bilateral discussions between Chevron and Udenna over the past 12 months, and demonstrates our close collaboration in achieving a positive outcome for all parties involved,” UC said in November.

It added that the company has crafted a plan for the future development of the Malampaya field and its surrounding fields, to ensure the future of Philippine energy security. The gas field could be depleted by 2024.

“The acquisition of Chevron’s interest in the Malampaya gas field marks an important milestone for Udenna, fitting strategically with our long-term ambitions of developing a sustainable clean energy business in the Philippines,” it said.

The entry of UC in the Malampaya consortium prompted Uy’s Phoenix Petroleum Corp. and China National Offshore Oil Corp. Gas and Power Group Co., Ltd. to ask the Department of Energy to suspend the permit to proceed with their joint LNG (liquefied natural gas) project.

“They are withdrawing their application and they want to reassess and submit a new concept. They want to revisit their LNG terminal project in lieu of the Malampaya development . They are going to tie it together,” Energy Secretary Alfonso Cusi said earlier.