Udenna absorbs Chevron team in Malampaya

Published April 14, 2021, 5:00 PM

by Myrna M. Velasco

Following government’s approval of its 45-percent stake acquisition in the multi-billion Malampaya project, Udenna Corporation conveyed that it absorbed the technical team and core of experts from previous interest-holder Chevron Corporation so it can seamlessly help in the continuous operation of the gas producing field.

Udenna Corporation Chairman Dennis A. Uy stated that as a parallel development — after his other firm UC 38 LLC formally received the approval of the Department of Energy (DOE) on its merger and acquisition (M&A) deal with Chevron for the latter’s unloaded 45-percent interest in Malampaya.

Dennis Uy

“UC38 continues to be led by the highly qualified team who were previously with Chevron and provide us with upstream technical, operational and commercial expertise based on global industry best practices,” Uy said.

The current president of UC 38 LLC, which is Udenna’s corporate vehicle on its Malampaya stake acquisition, is Belinda Racela, who also worked previously with Chevron Malampaya LLC.

The shareholdings’ changeover from Chevron to Udenna warranted the “transfer of rights and obligations” of the American firm to UC 38 LLC, according to the letter-approval issued by the energy department on March 26 this year.

There had been questions raised on the technical capacity of Udenna to operate a gas field venture, but its move on re-employing former Chevron personnel into its corporate fold is seen as a concrete remedy to that.

“We are committed to the safe, reliable and sustainable development of the gas-to-power industry in the Philippines,” Uy stressed.

He added that as their company assumes formal equity ownership in the gas field, Udenna will be one with the other consortium-members in “safeguarding the nation’s energy security by producing gas, which generates a fifth of the Philippines’ rapidly growing electricity needs.”

Uy emphasized their group is also fully supportive of “the country’s energy agenda on security, self-reliance and use of cleaner energy sources,” and to that, he qualified that the DOE’s final go-signal on its consummated transaction with Chevron “is a welcome progress to reach this end.”

The Udenna chairman further asserted that his company “will continue to explore the best avenue to provide a continuous and sustainable supply to meet the growing demand for cleaner power generation.”

To recall, Udenna previously indicated that in the ongoing 45-percent stake divestment of operator Shell Philippines Exploration B.V. (SPEX) in Malampaya, it is intending to exercise its option to acquire such shareholdings based on the prescription of their joint operating agreement (JOA) under Service Contract 38 (SC 38), which serves as the gas production facility’s license with the government.

The Uy-led firm has been inviting state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC), currently the minority shareholder in the Malampaya venture, as its partner in that acquisition so they can take hold of the gas field on full ownership basis.