DOE will not rescind approval of Malampaya stake sale

Published December 1, 2021, 4:08 PM

by Myrna M. Velasco

The Department of Energy (DOE) categorically stated that there is no legal reason for it to nullify or overturn the approval it granted to the sale of the 45-percent Malampaya stake of American energy giant Chevron Corp. the corporate vehicle of Udenna Corporation of businessman Dennis Uy.

In a virtual briefing, Energy Assistant Secretary Gerardo D. Erguiza Jr. noted that “the position of DOE is: there is no problem in the transaction, so there is nothing that the DOE has to rescind.”

The energy official said if the parties questioning that Malampaya transaction – primarily the Integrated Bar of the Philippines (IBP) and the Philippine Bar Association (PBA) – would want to be clarified on the particulars of that deal, the DOE would prefer that it will be directed to them so they can respond accordingly.

“We urge the IBP and the PBA that if they have any questions, they can give it to us – that if there is any case that is meritorious, we welcome any…let’s settle this once and for all in a proper legal forum, not a propaganda platform,” Erguiza stressed.

He opined that the difference of opinion between the DOE and its critics lies on the fact that the latter have claims that the DOE did evaluation of the sale transaction that had circumvented regulations or had not followed the rule of law.

The energy official argued that in the agency’s position, there is no law or rules that will apply or will require DOE to dip its hands in approving or evaluating that transaction because the nature of that business deal had been “shares sale and purchase” between two private companies; and there had been no changes in the corporate structures as a result of the shares divestment.

Erguiza still claimed though that since the DOE has a critical mandate to safeguard ‘national interest’ and uphold the country’s fundamental energy security agenda, it was prompted to review the Chevron-Udenna transaction and applied provisions of DOE Circular No. 2007-04-03, which is anchored on the prescriptions of Presidential Decree 87 or the Philippine Oil and Gas Law.

“What we’ve seen at DOE, there is no law (that applies to the transaction). But because of national interest and to see to it that our energy security is not put at risk, we at DOE had revisited this particular situation,” he expounded.

Separately though, the IBP still sounded off that “the questionable transfer of the Malampaya gas field facility invites more questions as more details are revealed,” as it also continuously questioned both the technical and financial capacities of Udenna as buyer of the controlling and operating shareholdings in the Malampaya gas-to-power venture.

The lawyers’ organization added “ shorn of all the smoke and mirrors, the irrefutable fact stands: what the DOE itself calls the backbone of the country’s power generation mix, is now in the hands of an untested and unknown entity.”

The IBP further reckoned “the defense that transactions between private parties are ‘not subject to review’ is unsatisfactory,” adding that the asset at risk “is a facility that sits right smack in an area that has grave national security implications.”

The group thus stipulated “it is not a simple matter of making the transaction transparent and understandable, and therefore acceptable. Malampaya is a critical piece of our national sovereignty and security.”

IBP further asserted that the Malampaya asset “cannot remain where it has been negligently left off,” hence it sought that “the transaction requires immediate review.” ###