Shell looking to sell stake in Philippines’ Malampaya gas project

Photo: Reuters

Royal Dutch Shell PLC is looking to sell its 45% stake in the Malampaya gas-to-power project in the Philippines, a key power source for the country’s main island of Luzon, its local unit said on Thursday.

“As part of an ongoing portfolio rationalisation to simplify and increase the resilience of its business, Shell is exploring its options with a view to divest its interest” in Malampaya, a spokeswoman told Reuters.

Shell would ensure a smooth transition of the asset to a credible buyer who would be well placed to optimise the value from Malampaya,” the spokeswoman said in response to emailed questions, without naming any potential buyers.

In what it called a “strategic” move to secure the long-term sustainability of its business amid the COVID-19 pandemic, local unit Pilipinas Shell Petroleum Corp last month decided to permanently shut down its refinery.

The decision comes as Shell is looking to slash up to 40% off the cost of producing oil and gas in a major drive to save cash so it can overhaul its business and focus more on renewable energy and power markets, sources told Reuters.

Malampaya’s natural gas, discovered in 1991 by Shell, fuels four power plants that deliver about a fifth of the country’s electricity requirements.

The divestment plan also comes about a year after Chevron agreed to sell its 45% interest in the project to Philippine oil and shipping group Udenna Corp.

The remaining 10% interest in the Malampaya project is held by state-owned Philippine National Oil Company.

Energy Secretary Alfonso Cusi said: “I’m not aware of who they (Shell) are negotiating with. What I know is they are looking for a buyer.”

Malampaya’s gas supply is expected to run dry by 2027, based on the latest projection of the Department of Energy, which is looking at imported liquefied natural gas as a replacement.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.