San Miguel re-evaluates interest in Malampaya

Published November 4, 2020, 11:28 AM by Myrna M. Velasco
https://mb.com.ph/2020/11/04/san-miguel-re-evaluates-interest-in-malampaya/

Diversifying conglomerate San Miguel Corporation indicated that it is still weighing in if it will pursue its intent to join the bidding for the 45-percent stake of Shell Philippines Exploration B.V. (SPEX) in the multi-billion Malampaya deep-water-gas to power project.

SMC President and COO Ramon S. Ang said the company just initially signified its interest in the asset, because as a business, it must always be on the lookout for opportunities – including the merger and acquisition (M&A) deals dangled in markets.

“In every transaction being offered in the market, we always signify our intention to review, to study if it’s a good deal, and we will definitely consider to buy if it’s a good deal,” he stressed.

Ang qualified though that the conglomerate has not taken initial steps yet to advance discussions with Shell’s team in Singapore or even with its financial advisor JP Morgan relating to the Malampaya asset divestment.

The SMC executive said he prefers to keep any decision on that targeted acquisition closer to his chest, and will just let competitors guessing on whether or not he will eventually firm up his bid on the asset.

“Let them guess…if our studies would show that it (Malampaya) is not a viable acquisition, then we will just keep quiet and will no longer join the bidding,” Ang said.

Several Filipino companies already sounded off interest to participate in the acquisition deal – including PXP Energy of business magnate Manuel V. Pangilinan; Udenna Corporation of businessman Dennis Uy; as well as the state-run Philippine National Oil Company.

Less known for now are the interested foreign companies that may have deeper pockets and possess more extensive technical experience in gas field operations.

Udenna previously stated it will invoke its ‘right to match’ any offer that Shell will accept as a “winning bid”- anchoring that move on a provision of the joint operating agreement (JOA) of Service Contract 38 or the license for the Malampaya project.

The Uy-led firm has invited state-owned PNOC-Exploration Corporation to be its partner in the targeted acquisition, so their tandem could eventually take full control of the gas field’s operations.

The divestment of Shell’s stake in Malampaya is deemed a ‘not so simple’ transaction; and the government will need to judiciously assess the technical capacity of the winning bidder because its job involves technical complexities of operating a gas field that will have implications on security of the country’s energy supply.