Shell has annouced the signature of an agreement with Malampaya Energy XP Pte Ltd (a subsidiary of Udenna Corporation), for the sale of its 100% shareholding in Shell Philippines Exploration B.V. (SPEX). SPEX holds a 45% operating interest in Service Contract 38 (SC38), which includes the producing Malampaya gas field, according to a statement.

The base consideration for the sale is US$380 million, with additional payments of up to US$80 million between 2022 to 2024 contingent on asset performance and commodity prices. Deal is expected to be completed by the end of 2021.

Wael Sawan, Shell’s Upstream Director, stated that the sale aligns with Shell’s plan to focus its upstream portfolio to nine core positions.

“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,” Swan added.

The company affirmed that this deal will not impact any other Shell businesses in the Philippines, and that Shell will continue to seek opportunities in the country where it can leverage its global expertise in line with its strategy.