Davao's Dennis Uy acquires Shell's Malampaya stake

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Metro Manila (CNN Philippines, May 20) — Davao-based business tycoon Dennis Uy further cemented his status in the Philippine market, with a majority stake in the Malampaya gas facility now under his belt.

Shell Petroleum N.V., in a statement on Thursday, said it has signed a sale-purchase agreement with Uy's Malampaya Energy for the sale of its 100% shareholding in Shell Philippines Exploration B.V. or SPEX.

SPEX has a 45% operating interest in the Malampaya gas field.

The deal means the Davao businessman won over the bid of tycoon Manny Pangilinan. San Miguel Corporation and Petron president Ramon Ang had also previously shown interest in pursuing the project.

"We are tremendously proud of Malampaya Energy for acquiring one of Shell's most successful natural gas assets in Asia, which of course includes the world-class SPEX team currently operating Malampaya," Uy was quoted as saying in a separate statement issued Thursday.

The base consideration for the acquisition is set at $380 million, Shell Petroleum said, noting that Malampaya Energy may have to shell out an additional $80 million "between 2022 and 2024 contingent on asset performance and commodity prices."

The transaction is being eyed for completion by end-2021.

Following the agreement, Uy now owns 90% of the gas field in offshore Palawan. Last year, the tycoon also bought the 45% stake of Chevron.

The government's Philippine National Oil Company-Exploration Corporation (PNOC EC) is left with the remaining 10%.

"Since it began commercial operations in 2002, Malampaya has supplied a significant portion of the Philippines' energy demand and it will continue powering the country with indigenous gas following a safe transition of the asset and its experienced workforce," said Wael Sawan, Shell's Upstream Director.

The gas project has contributed more than $10 billion in revenues to the Philippine government to date.

Dennis Uy's business empire

Uy, reportedly a good friend of President Rodrigo Duterte and a supporter of his 2016 election campaign, has been building his empire for the past years reaching the industries of oil, shipping and logistics, real estate and property development, education, tourism, and infrastructure.

READ: Davao City business magnates top donors in Duterte campaign

His latest venture is the country's new major telco player DITO Telecommunity—envisioned to be the tough challenger to the duopoly of Globe Telecom and PLDT—with an investment of over ₱257 billion for five years.

DITO Telecommunity, which Uy leads as chairman and CEO, has strong backing from Udenna Corporation and state-run China Telecommunications.

It is now up and running in select areas across the Philippines, hoping to provide a head-to-head battle against the dominant players, and eventually corner a significant portion of the telco industry.

RELATED: DITO Telecommunity boasts 500,000 subscribers after March launch

Just this Tuesday, the President signed into law the bill granting DITO Telecommunity a fresh 25-year franchise.