Group backs graft case over sale of Malampaya stake to Udenna


THE Sangguniang Laiko ng Pilipinas (LAIKO) said on Thursday it is backing the filing of graft cases against the people behind the controversial Malampaya stake sale to Udenna Corp.

In a statement, LAIKO President Roquel Ponte said Energy Secretary Alfonso Cusi and business tycoon Dennis Uy should be held accountable for the “incredible crony agreement” after a Senate inquiry showed apparent irregularities on how the Department of Energy (DOE) processed the transaction.

“We call on the Senate of the Republic of the Philippines and the Office of the Ombudsman to exert every effort to protect the interest of the government and of our people,” Ponte said.

In the series of hearings held by the Senate Committee on Energy on the matter, it was alleged that Udenna was not qualified to buy the 45-percent shares of Chevron Philippines Inc. in the Malampaya gas-to-power project.

“The undue advantage given to Dennis Uy, a known close supporter of President Duterte is horrendously appalling, tantamount to theft of our precious natural resources and putting the country’s energy security at risk,” Ponte said.

Last week, a group of concerned citizens filed a case before the Office of the Ombudsman against Cusi, employees of the Philippine National Oil Company’s Exploration Corporation (PNOC-EC) and other incorporators from Udenna. Chevron, Shell Philippines Exploration BV over the Malampaya deal.

The group alleged the incorporators of the agreement violated Republic Act 3019 or the Anti-Graft and Corrupt Practices Act, Presidential Decree 87 and RA 387 or the Petroleum Act.

Earlier, Davao businessman Uy maintained that the deal Udenna sealed with a Chevron subsidiary that has a 45-percent stake in the Malampaya gas field is fair and above board.

“At this juncture, we maintain that the acquisition of UC Malampaya Phils. Pte.,Ltd. [UCMP] of the shares of Chevron Philippines in Chevron Malampaya LLC is within the parameters of the law,” said Udenna spokesman Atty. Raymond Zorilla.

The Department of Energy (DOE) approved last April the sale and transfer of Chevron Malampaya LLC’s entire 45-percent stake in the Malampaya gas consortium to UC Malampaya Pte. Ltd. owned by Uy.

The sale, which was finalized in March last year, is worth $565 million.

Senate Energy Committee Chairman Sherwin Gatchalian found clear violation on the part of the DOE for approving the Chevron-Udenna deal despite “insufficient foundation” of legal basis to do so.

“To be honest about it, what I am getting here is that you legitimized an illegitimate transaction. Parang this transaction is not qualified pero pinilit ninyo to be qualified and legitimized it. That was a clear violation in the transaction. So, why despite the violation, your department approved this transaction?” Gatchalian asked DOE officials during a recent hearing.

The DOE’s Energy Resource Development Bureau– the group that assessed Chevron’s transfer of its stakes to UC Malampaya– almost did not go through evaluating UC Malampaya technically because the transaction involved only the sale of shares and the second party remains to be the same company with the same set of employees and technical experts.

The DOE officials even presented the technical and legal aspects of UC Malampaya, which suddenly changed the name to UC38 when it needed to be financially evaluated.

“You evaluated the technical and legal aspects of UC Malampaya pero pagdating sa financial aspect, naging UC38 na. Kasi hindi pumasa si UC Malampaya sa financial evaluation,” said Gatchalian.

“I’m discouraged by the fact that you admitted that there is insufficient foundation for legal basis, yet you pursued the recommendation and ultimately the DOE secretary approved it. Such an important asset was sold to a company that, based on your findings, is unqualified,” said Gatchalian.

DOE officials noted that Chevron Malampaya LLC initially said that a review of the transfer of the shares of its parent company Chevron Philippines, Ltd. to UC Malampaya Philippines Pte. Ltd. was not necessary.

However, DOE-Energy Resource Development Bureau Director Cesar Dela Fuente said that when Chevron Malampaya requested for a change of name the DOE insisted on a review of its deal with UC Malampaya.

“When I referred this to my bosses, the imprimatur of Secretary (Alfonso) Cusi is that in case of doubt, to apply the department circular as the benchmark to ensure that the parties are legally, technically and financially qualified,” said DOE-Energy Resource Development Bureau Director Cesar Dela Fuente.

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