PNOC-EC backtracks on add’l Malampaya shares acquisition

Published May 23, 2020, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2020/05/23/pnoc-ec-backtracks-on-addl-malampaya-shares-acquisition/

State-run Philippine National Oil Company-Exploration Corporation (PNOC-EC) has shifted ground on its reported acquisition of additional shareholdings in the Malampaya gas field project.

PNOC-EC Board Chairman and Energy Secretary Alfonso G. Cusi said “further discussions could not progress due to the COVID-19 pandemic.”

The energy chief rectified his previous pronouncement that the deal with the group of businessman Dennis Uy’s UC Malampaya Philippines Pte. Ltd. had already been concluded – in reference to the target of PNOC-EC to pur¬chase 10 percent of the 45 percent stake acquisition of Uy in the Malampaya venture.

“I wish to correct my earlier statement regarding the status of PNOC-EC’s participation in the Malampaya gas-to-power project,” Cusi stressed.

Had the transaction been sealed, PNOC-EC’s interest in the Malampaya field should have already been raised to 14.5 per¬cent from the 10 percent minority shareholdings it already holds in the project’s Service Contract 38.

But that will just hang on the blueprint for now, given the health crisis that hobbled the company’s investment deal in the country’s commercial gas field.

Cusi nevertheless qualified that the planned higher interest take of PNOC-EC in the gas project would remain in its forward investment plan, although he had not given any specific timeframe at this point.

“As part of its medium term plan, PNOC-EC aims to increase its Malampaya shares. The com¬pany had already expressed this interest to its joint venture part¬ners,” the energy secretary said.

Cusi further indicated the state-run firm “will continue its efforts on oil and gas exploration and production to address the increase in the energy requirements of the country.”

Capital flow in the country’s upstream oil and gas sector is among the priorities being advanced by the Department of Energy (DOE), especially so since it will need an immediate term replacement on the fuel output of the Malampaya field, given hurdles that may result either due to production decline or with the expiration of its service contract in 2024.

There had been an application for license extension on the operations of the Malampaya field, but it has yet to go through further evaluation and final action by the energy department.