A spokeswoman with Pilipinas Shell Petroleum Corp on Thursday said that the company is exploring possibilities to divest its 45% interest in the Malampaya gas-to-power project as part of a portfolio rationalisation. According to her, Shell will ensure smooth assets transition to a credible buyer who can optimise the value of the project. Previously, Shell’s Philippines unit decided to permanently shut its refinery due to weak economics amid the COVID-19 pandemic.
The move came as Shell aims at slashing oil and gas production costs by 40% in a major push that allows it to focus more on the renewable energy sector. Shell discovered the Malampaya gas field in 1991. It provides gas for four power plants that account for about 25% of the Philippines’ electricity requirements.
About a year earlier, local oil and shipping group Udenna Corp. acquired 45% interest in the project from Chevron. Meanwhile, state-owned Philippine National Oil Company holds the remaining 10% stake. The Department of Energy estimated that the Malampaya field would run dry in the next seven years. So far, Shell has not revealed with whom it is negotiating the stake sale.
