At this point, any agreement between Udenna Corporation subsidiary Malampaya Energy XP Pte Ltd and Shell Philippines Exploration B.V. (SPEX) on the acquisition of SPEX's 45% participating interest in Petroleum Service Contract No. 38 (SC38) is a private business transaction between the parties. In other words, the Department of Energy (DOE) did not take part in the decision of SPEX to sell, the bidding or negotiations that ensued, and its outcome.
The transfer of participating interest in SC38 Malampaya Consortium is governed by the terms of the Joint Operating Agreement (JOA) entered into by the members. Under the JOA, all parties must first consent to a sale of any or all participating interest.
However, once the transaction has been completed at the consortium level, it will still be submitted to the DOE for its review and approval in accordance with Presidential Decree No.87 otherwise known as the Oil Exploration and Development Act of 1972 (PD87). For its part, the DOE will, accordingly and judiciously, evaluate the legal, financial, and technical aspects of the transaction, and its impact to the obligations of consortium to the Philippine government according to the terms of SC38 and PD87.