MVP Group takes interest in Shell’s Malampaya stake

MANILA, Philippines — The Shell Group’s stake in the Malampaya gas-to-power project has also drawn the interest of the MVP Group, which has long been eyeing to be part of the $4.5-billion project in offshore Palawan, industry sources said.

But whether or not the Pangilinan-led group would indeed make a formal offer this time has yet to be finalized.

“The MVP Group is looking at it as part of its long-term vision,” said the source, noting that it makes sense for the group to have an integrated energy business.

Shell Philippines Exploration B.V. announced that it is exploring options to divest its interest in the Malampaya project as part of its portfolio rationalization efforts.

This comes almost a year after Chevron, Shell’s partner in the Malampaya consortium, also sold its 45 percent stake in the project.

Back then, the MVP Group also expressed interest in Chevron’s stake in Malampaya, which eventually went to Dennis Uy’s Udenna Corp.

Aside from the MVP Group, state-owned Philippine National Oil Co., tasked to develop and explore energy resources in the country, is also interested in Shell’s stake, a source also said.

Ramon Ang-led diversified conglomerate San Miguel Corp. (SMC) also disclosed to the Philippine Stock Exchange last week that it is interested in acquiring Shell’s stake in the Malampaya project.

A foreign group that includes Chinese companies may also be interested in acquiring Shell’s stake in Malampaya, another source said.

For the MVP Group, acquiring Shell’s Malampaya stake would bring synergy to its Service Contract 72 or the Recto Bank concession, located in the West Philippine Sea, which lies southwest of the Malampaya gas field.

London-listed Forum Energy plc., a unit of Pangilinan-led Philex Petroleum Corp. holds the license for SC 72 but exploration in the area is on hold due to geopolitical tensions.

Last year, when his group was eyeing Chevron’s stake in Malampaya, Pangilinan said there is a possibility that new resources can be found in the area including the nearby SC 72.

He said that if there is indeed gas in SC 72, his group can build a pipeline and connect it to the Malampaya facility – about 100 kilometers – and in the end can continue supplying 40 percent of Luzon’s requirements.

?The Malampaya project is developed and operated by SPEX, with a 45 percent stake, on behalf of joint venture partners Udenna (which acquired Chevron’s 45 percent stake) and Philippine National Oil Co., which holds the remaining 10 percent.

Chevron and PNOC acquired their respective stakes in the Malampaya project from Shell in 1990.

Supply from the Malampaya gas field is projected to be depleted by early 2022 or latest by 2027.

The MVP Group, through Manila Electric Co., Meralco PowerGen and Global Business Power, is a major player in the country’s energy sector.