Missing piece: Dennis Uy widely expected to flip $1B stake in Malampaya to blacklisted CNOOC

Missing piece: Dennis Uy widely expected to flip $1B stake in Malampaya to blacklisted CNOOC

Heavily indebted bilyonaryo Dennis Uy is widely expected to flip his 90 percent stake in the Malampaya project to China National Offshore Oil Corp. (CNOOC), one of the Chinese firms blacklisted by US President Joe Biden.

A Babbler said CNOOC, China’s largest liquified natural gas (LNG) importer and terminal operator, was the missing piece in Uy’s $1 billion leveraged buyout of 90 percent of Malampaya – $565 million for Chevron’s 45 percent stake in 2019 and up to $460 million for Shell’s 45 percent stake in 2021.

READ: MVP, EKR, Ongpin ecstatic! Forum stocks surge by as much as 50% after Duterte OKs oil exploration in WPS

Senator Win Gatchalian is seeking a Senate probe to determine whether Uy could run the Malampaya project, specifically its 504-kilometer long gas export pipeline to Batangas.

“It has to be very clear to the public what the criteria are and if the new company is competent..The government needs to assure the public that the next operator is competent and financially strong,” Gatchalian said in a TV interview.

According to the Babbler, CNOOC would provide the financial and technical muscle for Uy to take over the Malampaya operations, much like China Telecom’s role in Uy’s bagging of the third telco franchise through Dito Telecommunity.

The Babler said Uy had a previous deal with CNOOC to build an import terminal in February 2019 under Tanglawan, a subsidiary of Uy’s Phoenix Petroleum. The CNOOC deal was scuttled shortly after Uy announced his purchase of Chevron’s stake in October 2019.

With Malampaya’s gas reserves expected to be depleted by the first quarter of 2027, Uy was clearly looking at Malampaya’s pipeline when he acquired Chevron and Shell’s holdings and how it could play a crucial role in CNOOC’s interest in the massive oil and gas reserves in Service Contract 72 over Reed Bank which is close to Malampaya, the Babbler said.

A week after President Rodrigo Duterte lifted the moratorium on oil and gas exploration in the West Philippine Sea (WPS) in October 2020, former Justice Antonio Carpio had already speculated on CNOOC’s connection to Uy’s leveraged acquisition in Malampaya.

“Those in the know must be seeing something in the planned acquisition by Dennis Uy of the 45-percent shareholding of Shell in the Malampaya consortium, after the Davao-based businessman earlier bought the 45-percent shareholding of Chevron in the Malampaya consortium, which owns the underwater gas pipeline that runs from Malampaya to the coast of Batangas,” said Carpio in his Inquirer column.

“This is the same pipeline that will pump the gas from Reed Bank to Batangas. Dennis Uy happens to be the partner of CNOOC in a liquefied natural gas terminal project in Batangas,” Carpio added.

Carpio sees nothing wrong in CNOOC hunting for oil and gas in the WPS as long as it does so under SC 72 with Forum Energy of bilyonaryos Manny V. Pangilinan (PXP Energy), Ricky Razon (Apex Mining) and Bobby Ongpin (Atok Big Wedge where Uy has a four percent share).

Carpio said CNOOC and its SC 72 partners would get only 40 percent of the profits while the government would get 60 percent just like the income-sharing in Malampaya.

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