By Myrna M. Velasco
The Department of Energy (DOE) will be seeking the imprimatur of its counterpart agency Department of Finance (DOF) to transform the Chevron-leased property of the National Development Co. (NDC) into an “Energy City” that will then host liquefied natural gas (LNG) projects.
“What we want to do with the place is to be an Energy City. We wanted that to become an energy area because we wanted to use that for LNG terminal…I have to work with DOF, so there’s that process,” Energy Secretary Alfonso G. Cusi told reporters.
The lease pact of American firm Chevron Corporation with NDC subsidiary Batangas Land Co. Inc. (BLC) will lapse by January 2021 – and the board of the state-run firm had already decided on its termination.
The NDC subsidiary’s deal with Chevron had been among the government contracts labeled as ‘onerous’ by Finance Secretary Carlos Dominguez III, with him noting the very marginal 74 centavos per square meter rental that the American firm has been paying on the 120-hectare property.
On the property’s propounded transformation, Cusi indicated that the department “has a draft EO (Executive Order) that we are studying. The EO never came out because of pending issues.”
Once approval is given for the area to be converted into an “Energy City”, Cusi emphasized that this will be offered to prospective investors as the site of LNG ventures.
Davao businessman Dennis Uy previously looked at the Chevron-leased land as targeted site for his LNG project with China National Offshore Oil Corporation (CNOOC), but discussions did not move forward given pending issues that may have legal implications. Cusi said other companies like Dubai-headquartered Lloyds Energy also looked at that site.
“If the property will be awarded to us and we will be permitted to turn it into an Energy City, then we’ll have a master plan. For me that’s a dream, but I realize that there would be a lot of processes to get there,” Cusi stressed.
The energy chief similarly noted that if Chevron will be booted out from the property, this will not have any impact on the country’s fuel supply. He qualified though that the company did not have discussion with the department yet as to where it will be relocating its main import facility.
When asked if he is expecting Chevron totally having its exodus from the country – including the downstream part of its fuel business,” Cusi pointed out it will not be surprising because they are not just doing that in the Philippines but also in other countries.
The next anticipated exit of Chevron will be from its venture in the Malampaya field, of which shares divestment is currently being finalized to financial closing phase with a subsidiary of Uy-led Udenna Corporation.
The American firm had first withdrawn from its upstream geothermal venture in the Philippines in 2016; and the biggest guessing game now is on the future of its downstream oil business.