Recently, Shell Petroleum Corporation signed an agreement with Malampaya Energy XP Pte Co., Ltd. (a subsidiary of Udenna Corporation) to sell its 100% stake in Shell Philippine Exploration Co., Ltd. (SPEX). SPEX holds a 45% operating interest in Service Contract 38 (SC38), which includes the production of the Malampaya gas field. The basic consideration for the sale is US$380 million, and between 2022 and 2024, based on asset performance and commodity prices, additional payments of up to US$80 million will be paid. According to the agreement of partners and regulators, the transaction is scheduled to be completed by the end of 2021.

Shell Upstream Head Wael Sawan said: "Since the start of commercial operations in 2002, Malampaya has provided a large part of the Philippines' energy needs. After the safe transition of assets and experienced labor, it will continue to use local natural gas to power the Philippines. Today’s statement is consistent with Shell’s efforts to shift our upstream portfolio to a portfolio focused on 9 core positions."

SPEX employees will continue to provide continuous work, which contributes to the reliability and safety of continuous operations. Malampaya and its staff have made significant contributions to the Philippines and local communities in the past 20 years and are expected to continue to play an important role in providing energy to the Philippines.

The transaction has no impact on Shell's other businesses in China. After more than a century of successful operations, the Philippines is still an important country for Shell. Shell will continue to seek opportunities in the Philippines, where it can use its global expertise to align with its strategy. Editor/Sang Xiaomei