Graft charges involving ‘P21-B in gov’t losses’ filed vs DOE Sec. Cusi, Udenna’s Uy, others

Published October 19, 2021, 2:04 PM

by Jel Santos

Office of the Ombudsman

A group of concerned citizens on Tuesday, Oct. 19, filed a criminal complaint before the Office of the Ombudsman (OMB) against Energy Secretary Alfonso G. Cusi, businessman Dennis A. Uy, executives of Chevron Philippines, Inc., and other individuals over alleged anomalies in the Malampaya Project involving P21 to P42 billion in “losses to the government.”

The complaint was filed by Balgamel de Belen Domingo, Rodel Rodis, and Loida Nicolas Lewis who claimed they are “concerned citizens who advocate for the Filipino people’s right to energy security.”

Cusi, Uy and the business executives and individuals were charged with violations of Republic Act No. 3019, the Anti-Graft and Corrupt Practices Act.

The complainants alleged that Cusi and other respondents “conspired to give unwarranted benefits and advantage” to Uy’s Udenna Corporation and its subsidiary, UC Malampaya, in the sale of Chevron’s share and transfer of rights in the Malampaya Project, a deep-water gas-to-power project in Palawan.


They also charged executives of Shell Philippines Exploration (SPEX), citing a “Senate testimony revealed plans to exit the country and was negotiating a deal with Udenna early last year.”

“Aside from Cusi, who is also the ex-officio chairman of the Board of Directors of the PNOC Exploration Corporation (PNOC-EC), also named respondent was retired Gen. Rozzano Briguez, PNOC-EC president and CEO,” the group said in its statement.

Also charged were Lourdes Gelacio, PNOC-EC former OIC and CEO; PNOC-EC Directors Carlo Magno Aldevera, Farah Cañezal, Alejandro Cobol, Oscar Rabena, Johnny Tuason, Karl Ignatius Young, Avelino Tayag, and Albert Dela Cruz; and Udenna Directors Cherylyn Uy, Henry Albert Fadullon, Chryss Alfonsus Damuy, Ignacia Braga IV, Leandro Abarquez, Ma. Concepcion de Claro, Wilfredo Placino, and Raymundo Martin Escalona.

Also named respondents were Chevron Philippines, Inc., Chairman and President Billy Liu, Vice President Modesto Vergel de Dios, and Treasurer Maria Emma Ruiz; Chevron Malampaya President Melinda Racela; Shell Philippines Exploration Managing Directors Rolando Paulino Jr. and Paul Michael Nugent; Raouf Kizilbash, managing director and owner of UC Malampaya Philippines Ltd.; and several unidentified persons named as “John” and “Jane Does.”

The complainants claimed that the government’s monetary losses from the Chevron sale to Udenna is estimated at P21 billion, based on the average 45 percent gross share of Chevron, as member of the Malampaya consortium, for the years 2018, 2019, and 2020.

“The gross monetary losses could double to P42 billion a year if combined with the SPEX deal with Udenna,” they said.

They told the OMB that Cusi “acted with gross inexcusable negligence and for personal gain” when he “facilitated the effective transfer of Chevron’s rights and obligations, as well as its 45 percent participating share, to Udenna despite the knowledge that the transaction had no prior approval from the DOE (Department of Energy), and without ascertaining Udenna and UC Malampaya’s legal, technical and financial qualifications to perform Chevron Malampaya’s obligations.”

They pointed out that the sale ensued despite an admission in a Senate committee hearing last July that “Udenna has no experience in the exploration, extraction and production of any oil or gas reservoir in the Philippines or outside of the Philippines, and holds no service contract in or outside of the Philippines.”

Thus, they said, the finding of the Senate’s Energy Committee that Udenna “did not shell out a single centavo” in its questionable purchase of Chevron’s Malampaya shares amounting to US$565 million.

“Udenna’s transaction could not have been consummated with Chevron without: (a) external financing amounting to US$375 million from the NZB Group (New Zealand Banking Group in Australia) and the ING Bank (of Singapore); (b) its net entitlement of US$157 million [in] the proceeds of Chevron’s 45% interest from the Malampaya Project as partial payment of the purchase price; and (c) increase of Udenna’s capital stock amounting to US$33 million, which was not yet issued and subscribed,” the complainants said.

They also alleged that “questionable transaction” violates Malampaya’s service contract executed pursuant to Presidential Decree No. 87 which requires prior approval of the DOE in the transfer and assignment of contractual rights and obligations.

They alleged: “From the time Chevron and UC Malampaya executed the sale on 30 April 2019 until its closing on 11 March 2020, no approval from the DOE was secured or obtained. In fact, UC Malampaya was incorporated only on 1 September 2019, and yet it already ‘entered into the subject transaction’ on 30 April 2019. On this score alone, the transaction is considered as illegal, and thus, null and void.”