PNOC-EC matches Udenna’s offer for Malampaya stake

The Philippine National Oil Co.-Exploration Corp. (PNOC-EC) has exercised its right to match the offer of Dennis Uy-led Udenna Corp. (UC) for the purchase of a 45-percent stake in the Malampaya deepwater gas-to-power project.

PNOC-EC holds a 10-percent stake in the Malampaya project. UC recently acquired international petroleum giant Chevron’s 45-percent stake in Malampaya. The remaining 45 percent is still owned by Shell Philippines Exploration BV (SPEx).

With PNOC-EC exercising its right, it will then proceed to acquire 10 percent of UC’s 45-percent interest in the project.

“Yes, the board approved it already so PNOC-EC is exercising its right,” said Energy Secretary Alfonso  G. Cusi, who is also the chairman of PNOC-EC.

“The question now is how much. Well, it will be 10 percent of whatever value. The next question is how much did Udenna buy the 45 percent. If I remember it right, it’s $560 million plus. Whatever amount that is, PNOC-EC has the right to match that 10 percent,” Cusi added.

When asked for the reason that PNOC-EC exercised its right while SPEx, which has a much bigger interest in the project and is the operator of the project, did not, Cusi said, “We feel that the acquisition price is advantageous for EC. It’s an opportunity for EC to invest, because [we see] that the return will be good.

This matter, he added, will be further discussed during the PNOC-EC board meeting on Friday.

UC Malampaya Philippines Pte. Ltd., a unit of UC, signed a sale and purchase agreement to acquire the 45-percent stake of Chevron Malampaya LLC last October 25.

The deal is still subject to regulatory approvals, including from the Philippine Competition Commission.

The entry of UC in the consortium that owns and operates the Malampaya project prompted Uy’s Phoenix Petroleum Corp. and China National Offshore Oil Corp. (CNOOC) Gas and Power Group Co., Ltd. to ask the DOE 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,” said Cusi.