Solon chides MBC for seeking PNOC takeover of Malampaya gas field

Published December 8, 2021, 3:43 PM

by Ben Rosario

House Asst. Majority Leader and Cebu First District Rep. Eduardo Gullas slammed on Wednesday, Dec. 8 the Makati Business Club (MBC) for calling on the government to take control of the operations of the offshore Malampaya gas field.

Malampaya gas field

Gullas, chairman of the House Committee on Land Use, said the MBC must not pretend it is representing the entire business sector in the country when it asked government-owned Philippine National Oil Co. to take control of Malampaya.

“There are far more representative chambers of commerce and industry in the country that want the government to stay out of any business and avoid competing with private enterprises,” said Gullas who is also a senior member of the House Committee on Ways and Means.

“In fact, we would not be surprised if business groups in the provinces, such as those in Cebu and Davao, tend to perceive the MBC as an elitist club from ‘imperial’ Manila,” Gullas said.

The Cebuano solon explained that the objective behind the government’s petroleum service contracting scheme is “precisely to let private corporations assume the risk of spending capital to discover and develop our indigenous gas and oil resources.” “If they drill an offshore well that won’t flow gas or oil in commercial quantities, then the government does not have to worry about reimbursing them,” Gullas said.

“Right now, we already have Filipino tycoons engaged in petroleum service contracting, so there’s no need for PNOC to come in and compete, more so because the government does not have the wherewithal,” Gullas pointed out.

According to Gullas Manuel Pangilinan’s PXP Energy Corp., Enrique Razon Jr.’s Monte Oro Resources & Energy Inc., and Jaime Augusto Zobel de Ayala’s ACE Enexor Inc., among others, are already engaged in petroleum service contracting.

“We must also stress that any government acquisition and operation of a new energy asset would be highly regressive, considering that the State has been disposing of them for decades,” Gullas said.

“The business community, including the MBC, was actually very supportive of the government’s privatization program in the past, because they participated by buying and then developing the energy assets,” Gullas noted.

He recalled that in 2007, under pressure to bridge the budget deficit, the government sold its 60 percent stake in PNOC Energy Development Corp. (PNOC EDC) for P58.5 billion to a partnership led by Lopez-owned First Gen. Corp.

“When the government sold PNOC EDC, nobody protested and said the government should keep the asset because it is the country’s largest and the world’s second-largest geothermal energy producer,” Gullas said.

PNOC EDC was a Philippine Stock Exchange-listed entity with 40 percent of its shares held by the public when it was sold by the government.

Gullas also cited the case of the National Power Corp. (Napocor), whose generating and transmission assets were sold off and are now owned and operated by private firms.

“We got rid of PNOC’s and Napocor’s holdings not only because the government needed the money, but also because the government did not have the cash to modernize, improve and make these assets economically viable,” Gullas said.