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“As part of an ongoing portfolio rationalization to simplify and increase the resilience of its business, Shell is exploring its options with a view to divesting its interest” in Malampaya, a spokeswoman told Reuters.
“Shell would ensure a smooth transition of the asset to a credible buyer who would be well positioned to optimize the value of Malampaya,” the spokeswoman said in response to emailed questions, without naming any potential buyers.
In what it called a “strategic” move to ensure the long-term sustainability of its business amid the COVID-19 pandemic, local unit Pilipinas Shell Petroleum Corp decided last month to permanently shut down its refinery.
The decision comes as Shell seeks to cut the cost of oil and gas production by up to 40% in a major effort to save cash so it can review its business and focus more on renewables and energy markets, the sources told Reuters. .
Malampaya’s natural gas, discovered in 1991 by Shell, powers four power plants that supply about a fifth of the country’s electricity needs.
The divestment plan also comes about a year after Chevron agreed to sell its 45% stake in the project to Philippine shipping and oil group Udenna Corp.
The remaining 10% stake in the Malampaya project is held by the state-owned Philippine National Oil Company.
Energy Secretary Alfonso Cusi said: “I don’t know who (Shell) they are negotiating with. What I do know is that they are looking for a buyer.”
Malampaya’s gas supply is expected to be depleted by 2027, according to the latest projection from the Department of Energy, which is considering imported liquefied natural gas as a replacement.
(Reporting by Enrico Dela Cruz; Edited by Martin Petty, Kirsten Donovan)
