Dennis Uy buying 45% stake in Malampaya for $565 M

Published December 18, 2019, 12:00 AM

by manilabulletin_admin


Davao businessman Dennis Uy reportedly tendered a purchase offer of US$565 million (roughly ₱28.6 billion) for the 45-percent stake of American energy firm Chevron Corporation in the Malampaya deep water gas field project.

That has been hinted by the Department of Energy (DOE) based on documents that equity-seller Chevron Malampaya LLC and buyer Udenna Corporation have submitted to the government relative to the sale and purchase agreement (SPA) that the parties had earlier inked on the gas field venture.

From the purchase offer, Energy Secretary Alfonso G. Cusi told reporters that state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) will be exercising its “right to match” for the 10-percent fraction of the Chevron stake in Malampaya that is being divested.

The board of the state-run firm subsidiary, the energy chief noted, had already approved the company’s “right to match”, but the actual amount to be invested for the 10-percent will need to go through another round of approval.

“If it’s PNOC-EC exercising its right, yes, the Board approved it already,” but he said the value of the acquisition on that portion of the Chevron-Malampaya shareholdings has yet to be firmed up.

Cusi, nevertheless, indicated that if based on US$565 million offer of Udenna, that may entail an investment of US$56.50 million for the government-run firm.

“Let’s put it this way, we have 10% based on the 100% (of Malampaya). The only one that is selling is 45%, so we’re also getting the 10% of the 45%. So if it is at $565 million, whatever that amount is, PNOC-EC has to match the 10%,” the energy chief explained.

And with the additional equity to be cornered from the Chevron’s sale of interest, the energy chief noted that such will increase the government’s total shareholdings in the Malampaya project to the level of 14.5-percent.

That is taking into account that PNOC-EC already has 10-percent minority stake in the gas field venture; therefore, the additional 10% acquisition from the Chevron shareholdings will add 4.5-percent.

Cusi indicated PNOC-EC will have its another board meeting this Friday (December 20), but it will not be purposively for the Malampaya acquisition. “It’s our usual board meeting, it’s not just for Udenna,” he said.

Given the Malampaya acquisition that had shifted the investment focus of Dennis Uy, the energy secretary noted that Phoenix Petroleum Philippines Inc. and China National Offshore Oil Corporation (CNOOC) had sought withdrawal or suspension of their Tanglawan US$2.0 billion liquefied natural gas (LNG) and gas-fired power plant projects.

Cusi said the joint venture indicated that they will re-submit an application once they already figured out their next steps after reaching financial closing on the Chevron transaction.

Since the LNG project of the Phoenix Petroleum-CNOOC tandem had been given go-signal by the DOE last year, it never really moved an inch especially when its proposed site had been denied by a party it was supposed to be negotiating with.