MANILA -- Philippine tycoon Dennis Uy's Udenna conglomerate has reached a deal worth up to $460 million to buy a gas exploration and development company from Royal Dutch Shell, boosting its interest in the Malampaya gas field to 90%.
Malampaya Energy XP, a unit of holding company Udenna Corp., will acquire all of Shell Philippines Exploration, it was announced Thursday. The base price is $380 million, with Malampaya Energy paying up to an additional $80 million between 2022 and 2024 depending on asset performance and commodity prices.
The Malampaya field is an important energy source for the northern Philippine island of Luzon, which includes Manila. Shell and Chevron initially led the development. But as forecasts suggest the field will be depleted in several years, Shell has relinquished the stake as the company reorganizes its asset portfolio. The remaining 10% is still held by state-owned Philippine National Oil.
The Udenna group agreed last year to buy Chevron's 45% interest in Malampaya. The acquisition of the Shell unit, which operates the project, likely aims to enhance the group's gas development know-how.
Udenna and Uy have branched out into a wide range of fields in a spending spree that has raised concerns about the group's debt and spurred Uy to unload assets. The holding company also owns a stake in wireless carrier Dito Telecommunity, which launched here in March to challenge the country's mobile duopoly. Uy, whose companies own 60% of Dito, is the carrier's CEO.