PNOC Needs to Reevaluate Malampaya Stake Buy: Press

Philippines energy secretary Alfonso Cusi has said that the government’s plan to raise its stake in the Malampaya project would need to go through rigorous evaluation again, the Philippines Star reported on June 1.

Cusi noted, however, that increasing state-run Philippine National Oil Company’s (PNOC)'s stake in Malampaya would still be in the government's interest.

“I think so. But this will need a comprehensive restudy based on prevailing landscape,” he told the newspaper. Due to the Covid-19 outbreak, PNOC was unable to exercise its right to match Udenna Corp’s acquisition of Chevron’s 45% stake in the offshore Malampaya gas field.

In March this year, Udenna closed the deal to acquire Chevron’s 45% stake in the offshore gas field. Udenna, promoted by Dennis Uy, said its subsidiary, UC Malampaya Philippines, fully acquired shares of Chevron's subsidiary, Chevron Malampaya. 

Malampaya is operated by Shell Philippines Exploration, which has a 45% stake, while PNOC owns a 10% stake.

According to the newspaper, PNOC matched Udenna’s offer equivalent to its existing 10% interest in Malampaya. However, Cusi said further discussions failed to progress due to the pandemic.

Cusi said the state-run firm’s board would meet again “to discuss our way forward” on the Malampaya project. The decision to exercise PNOC’s right to match is to take advantage of the opportunity to increase its stake in Malampaya, the newspaper said.

The Malampaya gas project supplies fuel to around 40% of gas-fired plants in Luzon with over 3,000 MW in capacity. The Malampaya gas field is declining and gas supplies for the country’s power plants are looking ever less reliable.