Competition body OKs Dennis Uy's entry into Malampaya

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The Philippine Competition Commission has approved businessman Dennis Uy's plan to buy out Chevron's 45 percent stake in the Malampaya natural gas project.

Metro Manila (CNN Philippines, February 25) — Businessman Dennis Uy's plan to acquire a huge stake in the Malampaya gas field has secured the approval of the Philippine Competition Commission (PCC).

Specifically, PCC cleared Uy's buyout of a 45 percent stake in the gas-to-power project owned by Chevron Philippines, Ltd., adding it would not take further action on the transaction.

The Uy-led Udenna Corporation earlier revealed that it struck an acquisition deal with Chevron on October 25, 2019 to take the latter's stake in the gas field off Palawan province after a year of negotiations. The tycoon from Davao also owns the Phoenix Petroleum chain of gasoline stations.

"[T]he Commission finds that the acquisition by UC Malampaya of shares in Chevron Malampaya will not likely result in substantial lessening of competition," the antitrust body said in its January 22 decision, noting that there were no direct relationships between the two companies.

READ: Gov't to retake Batangas lot leased by Chevron next year

Malampaya supplies roughly 20 percent of the country's energy demand. The project site spanning 83,000 hectares is near Reed Bank, a part of the Philippines' exclusive economic zone but is also being claimed by China as theirs.

The gas field is operated by Shell Philippines Exploration B.V. with the government's Philippine National Oil Company. The contract with Shell expires in 2024, the same year that the Department of Energy estimates Malampaya to have substantially reduced its capacity.

Malampaya: When the gas runs out will Luzon have power?

Udenna earlier said that it is looking to further develop Malampaya "and its surrounding fields," adding that it would help the conglomerate shift into sustainable clean energy.

Uy beat tycoon Manny Pangilinan into taking Chevron's place in the natural gas project, with the government rejecting Pangilinan-led PXP Energy's pitch to further develop the oil-rich area.

READ: PXP asks gov't to reconsider Malampaya takeover bid

Once the petroleum exploration and production contract lapses, full control and ownership of the Malampaya natural gas and oil facilities will be turned over to the national government.