Prime Exploration Pte. Ltd., a subsidiary of Razon-led Prime Infrastructure Capital Inc. (Prime Infra), announced its acquisition from Udenna Corporation of businessman Dennis Uy the 45 percent operating stake in the depleting Malampaya gas field asset.

In a statement to the media, Prime Exploration stipulated that it already signed a "share purchase agreement" for the acquisition of MEXP, Holding Pte. Ltd., the entity used by Uy in the planned purchase of the Shell Philippines Exploration B.V. (SPEX) shares in the Malampaya gas field project.

It could be recalled that MEXP was vying for the 45-percent operating equity of Shell Philippines Exploration B.V. (SPEX) in the Malampaya facility, but the deal stalled because minority shareholder Philippine National Oil Company-Exploration Corporation (PNOC-EC) withheld its consent. MEXP also previously sealed a deal for the purchase of the shareholdings of Anglo-Dutch Shell in Malampaya for $460 million, but transaction closing never happened based on previous pronouncements by the Department of Energy.

With the latest acquisition, Prime Exploration said that the "change in control of SPEX from Shell to Prime Infra is subject to the consent of PNOC-EC and the Department of Energy,”

PNOC-EC is the petroleum exploration investment arm of state-run Philippine National Oil Company (PNOC), and it holds the minority 10-percent stake in the Malampaya venture. The other 45% is held by UC38 LLC, which is the company of Uy that acquired the shares unloaded by American energy giant Chevron in March 2020.

Prime Exploration emphasized “once such consents are given and the transition process for a safe and seamless handover of operations is completed, Prime Infra will assume full ownership and control of SPEX.”

It was not also disclosed if Razon bought it at the same price from the Uy-led firm or if he was given a discount.

With Razon’s takeover of the Malampaya gas field facility, all outstanding obligations and liabilities as well as rights due to the asset shall also be assumed by his company – including the extraction of the $700 million to $800 million worth of banked gas, as well as the $1.1 billion Malampaya tax case that is still pending with the Supreme Court.

Prime Exploration will also need to contend with the gas-drained state of the field, as well as the expiration of its Service Contract (SC) 38 in February 2024 -- although the way being targeted by the Malampaya buyer is to secure license extension from the government so the facility’s production life cycle can be extended.

Prime Infra Chairman Enrique K. Razon Jr., noted that “Prime Infra’s acquisition of MEXP reflects our shared commitment with the national government to help maintain energy security and independence as we transition to a renewable energy-fueled Philippine economy.”

He further said “We believe that gas is an important transition fuel in the near-term, reducing the need for baseload fossil fuels like coal.”

Razon, likewise, conveyed the plans of Prime Exploration “to accelerate investments on the Malampaya gas field to improve the output of existing wells and, if possible, develop new wells in the area once the license extension is secured from the government.”

According to the Razon firm-buyer, they are currently working with SPEX “to achieve a smooth transition” of the gas field’s operation to Prime Infra.

Prime Infra is considerably a newbie in the upstream oil and gas business segment, hence, the Razon group has yet to lay down its plans how it can efficiently manage such a complex and highly technical facility.