By MYRNA M. VELASCO
The local subsidiary of American energy giant Chevron Corporation has expressed willingness to dialogue with relevant government agencies and officials on its questioned deal with the subsidiary of state-owned National Development Company (NDC).
“We will maintain open communication with the government, an important valued partner, on this matter,” the American firm has noted in a statement to the media.
The American company has not specified though how it will concretely approach this dilemma; or what will be its next step in maintaining that “open communication” with the government.
As disclosed this week, the board of NDC had already greenlighted the dissolution of the Batangas Land Corporation, Inc. (BLCI), the subsidiary of the government-run NDC which is Chevron’s counter-party in a lease pact for a 120-hectare Batangas property wherein the latter’s key oil facilities are sited.
That dissolution move, to be effective in 2021, will then end the joint venture arrangement between the NDC-owned firm and Chevron which was signed in 1975.
Finance Secretary Carlos G. Dominguez III labeled the BLCI-Chevron deal as “onerous” as it was established by the NDC Board that the rental fee being paid by Chevron is way below the property’s market value.
Chevron nevertheless argued that the agreement on the Batangas property was above board, and “was entered into in compliance with all Philippine laws and regulations.”
The American firm further opined that the deal “has been beneficial to both the government and CPI (Chevron Philippines Inc.),” but there had been no details also on what benefits this deal yielded to both parties.
Chevron similarly recounted its more than a century stretch of operations in the country, which it signifies as a manifestation of investment commitment to the country.
“As one of the pioneer energy companies in the Philippines which has been operating here for over a hundred years, our commitment to the Philippine market remains strong,” the company stressed.
On the upstream level of its operations at the Malampaya field, however, Chevron already announced its exit last year once the US$565-million buy-in of businessman Dennis Uy for its 45% stake in the gas field will reach financial closing with the requisite government approvals.
In the downstream oil sector, there are persistent talks that the American company may also give up this segment of its business and will totally pack its bags out of the country., although this was already denied previously by Chevron.