Amid controversies stirred up by the transaction, the Department of Energy (DOE) indicated that it had not seen ‘violation’ in the sale and purchase agreement (SPA) sealed by American firm Chevron Corporation and Udenna Corporation in the 45-percent stake of Malampaya that was unloaded by the former in March this year.
“In our initial evaluation, we have not seen any that would make the transaction void,” Energy Secretary Alfonso G. Cusi told reporters.
It was in a Senate Committee on Energy hearing last month where the energy officials sounded off that the Chevron-Udenna deal is a “voidable contract’ -- in the event that the DOE will discover any lapses committed by the parties in their transaction for the Malampaya project.
Cusi qualified though that the energy department has yet to finalize all evaluations of the documents submitted by Udenna and Chevron to the DOE; and they are scrutinizing if these are all in keeping with the provisions of Service Contract (SC) 38 of the Malampaya field as well as with the government policies.
“Our presumption here is on the concern of regularity in the transaction of the two parties. We are making sure that everything is compliant,” Cusi stressed.
Asked if the department has any definitive timeline on when it will be firming up its approval on the Chevron-Udenna deal, Cusi noted that the matter is being handled by the Energy Resource Development Bureau, “but we’re rushing it.”
Energy officials previously told the Senate, that while the payment of US$565 million for the unloaded Chevron shares had already been consummated, the transaction itself is still ‘not completed’ without the final approval of the DOE.
“For Udenna and Chevron, it’s a transaction between two parties. We’re just making sure that the interest of the republic is not compromised -- the interest of the government; and the service to the people is not compromised,” Cusi stressed.
He said the department will need to guarantee that the processes are in conformity with all laws and rules, given the massive cash that the Udenna firm of businessman Dennis Uy had coughed up for that merger and acquisition (M&A) deal.
“The parties cannot afford not to be compliant; and their detailed work on the transaction were not just done recklessly,” the energy chief opined.
The sale of Chevron’s stake in the Malampaya field is just the first exit of one of its major shareholders; since even the gas field’s operator – Shell Philippines Exploration B.V. – has already announced its divestment plan for its interest in the asset.
The service contract of the gas field is due to expire in 2024, hence, it is a major challenge for the Philippine government to discover its next petroleum field that could turn in commercial scale discovery with the magnitude of Malampaya.