The mystery deepens.
This was how opposition Senator Risa Hontiveros described Udenna Corporation’s buy-out of Chevron’s 45 percent share in the Malampaya gas-to-power project.
Hontiveros said the government, particularly the Philippine National Oil Company-Exploration Corporation (PNOC-EC), practically let go of a very good opportunity when it did not exercise the government’s right of first refusal in the acquisition of the Malampaya gas field.
After conferring with Energy Secretary Alfonso Cusi in last Tuesday night’s (Nov. 16) budget deliberation, Senator Sherwin T. Gatchalian, vice-chairman of the Senate Finance committee, said there are several factors that militates against the government’s purchase of Chevron’s 45 percent share.
Gatchalian said PNOC ER did not want to buy out Shell and Chevron because there are many constraints such as government laws, specifically the Procurement law, that are ‘’restrictive’’ to efficient operation of a business such as Malampaya.
Another opposition senator, Francis ‘’Kiko’’ N. Pangilinan, said he finds it disturbing that the only reason the Department of Energy could offer in foregoing with the right to first refusal in the acquisition of the Malampaya gas field is ‘negative factors and constraints.
Gatchalian, also chairman of the Senate Energy committee, said the Department of Energy (DOE) would have to shell out $565 million to buy the 45 percent share of Chevron and another $361 million for Shell’s 45 percent share of Malampaya.
Pangilinan and Hontiveros expressed their concern on the failure of energy officials to act on the interest of Shell company in its letter in 2019 to explore for gas and oil in the vicinity of Malampaya.
Gatchalian said Shell expressed its interest in exploring the area near Malampaya in its letter to DOE in 2009.
Another letter was sent to DOE in 2018.
The gas reserves of Malampaya were expected to dry up by 2024.
Asked by Hontiveros whether another gas supply could be on stream before the gas reserves of Malampaya dry up, Gatchalian said ‘’there is no time from now to 2024’’ because gas and oil drilling operations are ‘’complex’’and there are lots of technical studies to be undertaken.
‘’It is capital-intensive and long-term,’’ he added.
Hontiveros said that potentially, there are oil and gas reserves in the Malampaya area which is located northwest of Palawan.
The ‘’mystery’’ on the buyout by Udenna Corporation, a firm owned by Dennis Uy, an ally of President Duterte, was expressed by Hontiveros and Pangilinan in last night’s Senate debate on the proposed 2022 budget of the Department of Energy (DOE) which is embedded in the proposed 2022 P5 trillion national budget.
Hontiveros noted that Udenna Corp. virtually spent zero dollar in buying the Chevron share of the Malampaya worth P565 million, since most of the money used by the company were borrowed from banks, from the proceeds of Chevron’s 45 percent entitlement from Malampaya profits and from equity.
“We know how important Malampaya is, but why did the government let go of it? It’s like having jewels of the country that have been deliberately let go of. The mystery remains and even deepens,” Hontiveros said.
Pangilinan said the Senate deserves a better explanation, asking the department as well as the PNCOC-ER to submit the minutes of the board meetings on this matter.
“This is just a broad, general statement to justify the turnover to a private corporation of over billion dollars’ worth of assets or at least, what could have been government assets… Let’s look at the numbers, let’s look at the computations, let’s look at the projections, then we will understand what are these negative factors that created constraints,” Pangilinan said Tuesday, November 16, 2021. I
In March, Davao-based Udenna Corporation acquired majority stake in the Malampaya gas project.