Uy-led UC Malampaya Philippines Pte. Ltd. is seeking resolution of the P27.3-billion dispute on capacity payments for the 1,200-megawatt Ilijan gas-fired power project; and it formally lodged this concern in a Senate hearing as one of the major issues that the company wants to be accorded with definitive settlement relating to the future of the Malampaya gas field project.
Aside from the protracted Ilijan dispute between state-run Power Sector Assets and Liabilities Management Corporation and South Premiere Power Corporation (SPPC) of the San Miguel group, the subsidiary of Udenna Corporation is also batting for a decision on the Commission on Audit (COA) case relating to income tax interpretation of the royalty sharing between the government and the service contractor in the gas field venture. The case is pending with the Supreme Court.
The other concern raised by the company is on the banked gas, of which current ownership and claim rests upon state-run Philippine National Oil Company.
Belinda Racela, president of UC38 LLC, a subsidiary of Udenna Corporation which purchased the 45-percent stake in Malampaya from American firm Chevron, noted those are the three issues of “utmost importance” to be given prompt resolution if the government is really bent on addressing the energy security concerns of the country.
UC38 LLC of businessman Dennis Uy is part of Service Contract (SC) 38 consortium that is now negotiating with the government, through the Department of Energy (DOE), for possible extension of the Malampaya field’s license beyond the life of the initial SC that will expire in 2024.
“We have supported the life extension effort of the consortium, and more importantly, we continue to support the operator in continuing reliable operations of the Malampaya facilities,” Racela said.
She added that UC38, “will continue to support the consortium-partners and government in pursuing solutions to address issues involving energy security by continuing our focus in developing the Malampaya assets to provide indigenous clean and reliable energy.”
Racela emphasized “UC38 since March had demonstrated that they continue to exercise their due responsibility as non-operator. UC38 like SPEX (Shell Philippines Exploration B.V.) is an all-Filipino team, we’re highly qualified and technically experienced in the oil and gas industry.”
An audited financial statement of PSALM had shown that its receivables from SPPC for the Ilijan plant had gone up to P27.308 billion as of end-December 2019 from the 2018 level of P21.954 billion.
Of the total amount, PSALM stipulated that P17.920 billion of its accounts-receivables for the Ilijan plant had already been past due, specifying that “the overdue amount arose from disputed items and differences in interpretation of certain provisions of the IPPA Administration Agreement.”
Based on the state-run company’s computation, its past due receivables from SPPC amounted to P4.622 billion from June 26, 2010 to December 25, 2012; and P11.515 billion from December 26, 2012 to December 31, 2018; and the aggregate amount had been levied with value added taxes (VAT) amounting to P4.995 billion.
San Miguel President and COO Ramon S. Ang told reporters that he is amenable to settle the amount being claimed by PSALM if SPPC will be presented with justifiable calculation based on the terms of the Ilijan plant’s IPPA contract.
“We are willing to pay if they will release computation. But how can we pay if they don’t give us the computation,” he stressed.