Shell (LON:SHEL) has completed the sale of its Malampaya gas field in the Philippines to Prime Infrastructure Capital following regulatory approvals and consent from joint venture partners.
“This sale completion transfers control of Shell Philippines Exploration (SPEX) from Shell to Prime Infra effective November 1, 2022. SPEX staff will continue their employment under the new ownership,” Shell said today.
“SPEX, under the ownership of Prime Infra, will continue to own a 45% operating interest and be the operator of the Malampaya gas field. The other members of the Service Contract 38 consortium are UC38 LLC, a subsidiary of Udenna Corporation, and PNOC Exploration Corporation (PNOC EC). They respectively own 45% and 10% participating interests,” added Shell.
“This deal has no impact on other Shell businesses in the country. The Philippines remains an important country for Shell after over a century of successful operations. Shell will continue to pursue opportunities in the Philippines where it can leverage its global expertise in line with its Powering Progress strategy,” added Shell.
The Department of Energy (DOE) approved the acquisition deal between Prime Infrastructure Capital and Shell Philippines Exploration in early October.
“Prime Infra was found to be technically, financially, and legally qualified as a transferee and a successor to Shell as operator of Malampaya natural gas project,” the DOE said in a statement at that time.
“The DOE’s approval is conditioned on SPEX remaining to be a subsidiary of Prime Infra, and on the continuing validity of Prime Infra’s commitments and undertakings to the DOE in respect of SPEX’s obligations as operator of Malampaya Service Contract 38,” it added.
In a separate statement, Prime Infra chairman Enrique Razon Jr. welcomed the decision of the DOE as this would allow the company to further explore the natural gas field.
“We will contribute by doing all that can be done to produce as much gas as possible to sustain production in support of the power demand in Luzon,” Razon said.
Prime Infra said it is committed to deliver “outstanding operational performance and further the potential of SC38 covering the Malampaya deep-water gas-to-power project to ensure continuity of production as long as the reserves support it”.
“Prime Infra’s energy portfolio has always been aligned with the national government’s objective towards attaining energy independence and security, while reducing the country’s reliance on fossil fuels. Prime Infra is well-positioned to carry on the world-renowned track record of the Malampaya asset and therefore, the next urgent step for the company is to sustain and expand gas production while we promptly address the license extension for SC38,” Prime Infra president and chief executive officer Guillaume Lucci added.
Malampaya’s service contract will expire in 2024 and the field, which supplies the gas needed to produce about a fifth of the Philippines’ electricity needs, is expected to be depleted by the end of the decade.