The Department of Energy (DOE) indicated that it is amenable to planned takeover of Razon-led Prime Infra Holdings Inc. for the continued operations of the Malampaya gas field facility.

In a statement to the media, Energy Secretary Alfonso G. Cusi noted that the ongoing partnership discussions between Razon and current Malampaya shareholder-businessman Dennis Uy, chairman of Udenna Corporation, is a “a positive development” for the Malampaya venture and the power plant projects that serve as its major gas off-takers (buyers).

Apart from Uy’s entry, this is the only other time that Cusi immediately sounded approval of the incoming investor for Malampaya. He was apparently cold-hearted about the other investors who previously expressed interest in the gas field venture, nonchalantly rebuffing them that the DOE has nothing to do with those previous transactions.

This time, however, Cusi is welcoming the Razon group with open arms, with him stating that the Prime Infra-Udenna deal is a "positive development not only for the Malampaya consortium, but also the power sector as a whole.”

In the view of the outgoing energy chief, “their involvement could further improve the financial standing and technical experience of the consortium, and more importantly, facilitate the progress of much-needed and urgent development of Malampaya, given the depleting reserves in the existing wells.”

Cusi similarly hinted that the Razon group is purchasing Shell Philippines Exploration B.V. (SPEX), the subsidiary of energy multinational Royal Dutch Shell, which is currently the entity operating the Malampaya gas field.

But Cusi and the other energy officials refused to answer media queries on whether or not the "withheld consent" of minority shareholder Philippine National Oil Company- Exploration Corporation (PNOC-EC) on the Malampaya shares’ divestment of Shell had already been lifted.

The DOE was also tightlipped on media questions if the license extension for the continued operation of the Malampaya field – beyond the expiration of its Service Contract (SC) 38 in February 2024 – had already been granted by the energy department and the Office of the President.

Prime Infra, in an earlier statement, conveyed its willingness to apply for Malampaya’s license renewal; but when SPEX originally batted for it, that was a process which took more than 10 years for DOE to review and no definitive decision has been rendered until now.

Cusi further pointed out that “should the negotiations push through, the DOE looks forward to SPEX continuing as the operator of Malampaya and rapidly progressing with the urgent drilling activities required to further develop Malampaya and arrest the depletion.”

He highlighted that based on DOE’s data and at current depletion rates, Malampaya will only be able to provide gas sufficient for 1,000 megawatts of power by 2024 versus 3,000MW in 2021.”

Current studies show that Malampaya field’s production life cycle may still be extended until 2027-2029, but at the scale of gas production that will be way lower than current output rate.