Energy Secretary Raphael Lotilla said Wednesday the government’s approval of the sale of the 45-percent stake of Shell Philippines Exploration B.V. in the Malampaya gas-to-power project to Prime Infrastructure Capital Inc. of businessman Enrique Razon Jr. was premised on its commitment to expand gas production and possibly develop nearby resources.
“The approval by the DOE of the sale of Shell ‘s interest in SC 38 of Malampaya was premised also on the commitment of the new entrant to maximize the development of the existing resources in the Malampaya Camago reservoir with a view to developing the nearby fields as well,” Lotilla said, referring to Service Contract No. 38.
The DOE approved the sale of Shell Philippines Exploration shares to a subsidiary of Prime Infra after a thorough financial, legal and technical review.
“The new entrant is committed to maximize the utilization of the remaining natural gas in the Malampaya-Camago reservoir with a view to developing nearby gas fields,” said Lotilla.
“I am confident that this trend will continue as we reaffirm to prospective investors the openness of our economy to foreign and local investors, and we assure them of the continued stability of our legal framework, especially in the upstream oil and gas sector,” he said.
The DOE cleared the sale last month after Prime Infra was found to be technically, financially and legally qualified to take over as the new operator of Malampaya.
SPEX will remain a subsidiary of Prime Infra, which will assume full ownership and control of SPEX upon completion by Nov. 1 for the seamless turnover of operations.
The Malampaya project is one of the country’s most important power assets, producing natural gas for power plants in Batangas City that provide up to 20 percent of Luzon’s total electricity needs.
The project started operations in 2001, and SC 38 will expire in 2024.
Prime Infra vowed to contribute by doing all it can to produce as much gas as possible to sustain production to support power demand in Luzon.
PNOC Exploration Corp., which has a stake in Malampaya project, issued its consent to the sale of SPEX shares to Prime Infra.
“Prime Infra’s energy portfolio has always been aligned with the national government’s objective towards attaining energy independence and security while reducing the country’s reliance on fossil fuels,” Prime Infra president and chief executive Guillaume Lucci said.