In a disclosure to the Philippine Stock Exchange (PSE), PNOC-EC general counsel Elpidio Gamboa Jr. said the SC 38 operator decided to exercise their right to match the offer of LG International.
"We would like to inform the Exchange that our SC 38 partners, ChevronTexaco Malampaya LLC, Shell Philippines LLC and SPEX, have notified us their election to exercise their right to match the terms offered by LG International for the latter’s proposed acquisition of 4.9 percent of PNOC-EC’s 10 percent participating interest in SC 38," he said.
Gamboa said "we have advised LG International of said development and we shall refer the matter soonest to the board of directors of the PNOC and PNOC-EC, as well as the privatization council, for the way forward."
Late last month, the Committee on Privatization of the government approved the sale of the 4.9 percent of its participating interest in the Malampaya natural gas project in Palawan to LG International-led consortium composed of Korea Gas Corp., Seoul City Gas Co. and Dae Sung Industrial.
PNOC-EC did not disclose the financial details of the sale as the other members of the Malampaya consortium can still challenge and match the Korean group’s offer within 15 days which lapsed April 7.
"We will discuss that after the financial closing. But it’s definitely more than what we bought it for. We’re not willing to sell it at less than $101 million," PNOC president Eduardo Manalac said.
LGI, one of the largest Korean general trading companies and a leader in trading, financing and international investment, said its entry to the Malampaya is part of its active participation in resource development in the Middle East, Southeast and Central Asia.
The consortium is expected to earn $800 per year for 18 years from 2005 to 2022 from the investment to the Malampaya gas well.
The purchase amount was not disclosed. Under the sale, LG International Corp. will take 35 percent of the 4.9 percent stake; partner Korea Gas Corporation, 30 percent; Daesung E&C, 20 percent; and Seoul City Gas Co., Ltd, 15 percent..
Members of the privatization council include the heads of the Department of Budget and Management, National Economic Development Authority, Department of Trade and Industry and Department of Justice. The secretary of the finance department chairs the council.
The government is selling the stake to raise funds to help reduce its $3.6 billion annual budget deficit.
The Malampaya natural gas in Northern Palawan could yield three trillion cubic feet of gas that could be used to fuel up to 3,000 megawatts of electricity for 20 years, which is equivalent to more than half of the electricity requirements of Luzon even during peak hours. It also has recoverable reserves of 85 million barrels of condensate.