THE Philippine Competition Commission (PCC) on Monday said it was not notified of the deal between a unit of Udenna Corp. and Shell Philippines Exploration B.V. (SPEx), which holds a 45% stake in the Malampaya deepwater gas-to-power project.
“In Udenna’s transaction to take over controlling stake in Malampaya from Shell this year, this was not notified to PCC due to the increase in notification threshold to P50 billion under the Bayanihan II,” PCC Chair Arsenio M. Balisacan said in an emailed statement on Monday.
However, the PCC said it was notified of the deal between another Udenna unit and Chevron Malampaya LLC, which earlier sold its 45% stake in the offshore Palawan project.
In May this year, Shell Petroleum N.V said that it had signed with Udenna unit Malampaya Energy XP Pte. Ltd. for the sale of its 100% shareholding in SPEx, which holds a 45% operating interest in Service Contract (SC 38) that includes the Malampaya gas field.
The deal — valued at a base consideration of $380 million plus additional payments of up to $80 million — is in line with group’s upstream portfolio transition. The transaction’s effective date started on Jan. 1, 2021.
The other firms with interest in SC 38 are Udenna unit UC38 LLC with 45%; and state-led Philippine National Oil Co. Exploration Corp. (PNOC-EC) with 10%. UC38 acquired its stake in March last year from Chevron.
Mr. Balisacan added that the body also only looks at the competition side of transactions and defers other aspects, such as firms’ capability to operate, to sector regulators.
As such, he said the PCC “found no competition issue” in the transaction of Udenna to buy all the shares of Chevron as “Udenna was not engaged in the natural gas business.”
The statement came after Senate energy committee chair, Senator Sherwin T. Gatchalian, held that the Energy department’s approval of the deal between Udenna and Chevron was “defective” and is therefore “invalid.”
In the Senate energy committee’s budget hearing on Thursday, Mr. Gatchalian again questioned the said deal between Udenna and Chevron as under Presidential Decree 87, sale transactions involving oil exploration require prior approval from the government, which in this case is the DoE.
The DoE had earlier claimed that it was not informed of the transaction and that it did need to approve the agreement as it was an agreement between two private companies.
However, during the hearing on Thursday, Energy Secretary Alfonso G. Cusi said the DoE did approve the sale through a “farm-in process,” but Mr. Gatchalian said the new process used was not stated in any of the documents submitted by the DoE on the Malampaya buyout.
The Malampaya gas field covers an area of about 830 square kilometers. It provides up to 20% of the Philippines’ energy requirements and reduces its oil imports. — Bianca Angelica D. Añago