Page 5 - AsianOil Week 22 2022

AsianOil COMMENTARY AsianOil

Malampaya is the
Philippines’ only
operational gas field.

Malampaya’s reserves are expected to become businesses, including Malampaya. One of the
depleted by the end of the decade unless new sources cited by the news service at the time
finds are made. And Udenna said last month identified Razon as being among the preferred
that efforts to develop and extend the life of the bidders for Malampaya.
field had been put on hold, blaming a Senate In a separate Reuters report from this week an
investigation into the company’s acquisition AP Securities research analyst, Carlos Tempo-
of its majority stake in Malampaya. It appears ral, said the transaction would be beneficial for
that these efforts can now be revived under both Razon and Uy.
Prime Infra as the controlling shareholder in “Amidst a rising interest rate environment,
the project. debt reduction is a must for Uy, hence the asset The two
The two companies are planning to extend sale,” Temporal said.
the field’s life and this comes as power demand For Razon, meanwhile, the acquisition is companies are
in the country picks up following the easing of anticipated to improve the viability of his oil planning to
restrictions brought in as a result of the corona- and gas exploration franchise in the Reed Bank,
virus (COVID-19) pandemic. At the same time, which the Philippine Department of Energy extend the field’s
war in Ukraine has heightened concerns over (DoE) has previously said contains larger nat-
energy security globally. ural gas reserves than Malampaya. life and this
“Also, there is a sense of ownership to achiev- It is worth noting that Malampaya is the Phil-
ing national energy independence when you ippines’ only operational gas field. The country comes as power
bring in Filipino companies to handle the reins is preparing to start importing LNG as it seeks to demand in the
of a critical power infrastructure and this is what balance rising demand with shifting to cleaner
Prime Infra aims to do with our participation forms of energy. This may spur Prime Infra or country picks up.
in Malampaya,” Razon said. “We will invest and other companies to engage in more exploration
sustain the development and production of in the region considered to be resource-rich.
domestic gas as long as the terms of the oper- The transaction will require government
ating licence and the natural resources permit.” approval, and, as shown by the other deals
involving stakes in Malampaya, this can take
What next? time. Nonetheless, once the transaction has
The sale to Prime Infra comes as no surprise. received the necessary approvals and can close,
Reuters had reported in May that Uy was con- this could mark the start of a turnaround for the
sidering selling several billion dollars’ worth of field, at least in the shorter term.™

Week 22 03•June•2022 www. NEWSBASE .com P5