The Senate requested the Department of Energy to review Dennis Uy’s Udenna Corporation’s successive acquisition of the Malampaya Deep Water Gas-To-Power Project from the Royal Dutch Shell this year and Chevron Corporation last 2019. The project is the sole natural gas mining in the country. It is located offshore of Palawan.

Uy bought 45% of Shell’s stake in the project for P18.2 billion. He will pay an addional P3.8 billion in 2022-2024. Meanwhile, he finalized his acquisition of Chevron’s 45% stake last year for ₱27.1 bilyon last March 2020. All in all, Uy shelled out $1 billion or ₱48 billion to control the project.

The two companies sold their operations since the reserved gas in the area is dwindling. From 2024 to 2027, the remaining 859 million standard cubic feet of natural gas will run out. In reality, Uy is not buying the remaining natural gas in the area but the old production wells and pipelines of the project.

The Malampaya Gas Project supplies 35% of electricity in Luzon. The gas from the project is processed by the First Gen Corporation and is largely sold to Meralco and distributed in Metro Manila.

Uy acquired the project using 90% foreign capital. He was granted loans mainly by the Australia and New Zealand Banking Group and ING Bank. In the case of buying out Shell, the transacton was supervised by Farallon Capital, one of the biggest hedgefund in the US.

Many are wondering how Uy managed to get bank financing to buy the Malampaya Gas Project. Last April, news was he was deeply in debt by $2 billion and was in the process of selling assets. Uy’s company also has no experience in natural gas operations.