THE Senate Committee on Energy pressed the Department of Energy (DOE) to ensure full transparency in its review of the $380-million sale of Shell Philippines’s stake to Udenna subsidiary Malampaya Energy XP.
Senator Sherwin Gatchalian, committee chairman, on Friday renewed his earlier call for the DOE to “be transparent in its review” of the sale of Shell Philippines Exploration BV’s (SPEX) entire stake in the Malampaya gas field project to Malampaya Energy XP Pte. Ltd., a subsidiary of Udenna Corporation owned by businessman Dennis Uy.
The senator recalled that just recently, Energy Secretary Alfonso Cusi himself confirmed the DOE was “still in the process of evaluating the transaction and no decision has been reached.”
Gatchalian recalled that Cusi had claimed the parties concerned still have to comply with government requirements “before it gives its stamp of approval on the sale” reported in May.
Stressing that the deal involved is “no ordinary” State-owned asset, Gatchalian said he expects his fellow lawmakers would also be keen to know the criteria to be used in evaluating this transaction.
“It has to be very clear to the public,” Gatchalian reminded energy officials involved in the deal.
The senator said last April 15, he also sought justification from the DOE on its decision to give the green light to the transfer of Chevron’s 45-percent interest in the Malampaya project to UC Malampaya Philippines, another subsidiary of Udenna Corporation.
Gatchalian likewise stressed the significance in acquiring Shell’s stake as the company not only holds a 45-percent share but also the operatorship of Service Contract No. 38, a deep water license that comprises the Malampaya gas field.
The senator noted that “whoever steps in to take the place of Shell will supply gas to our homes. Malampaya gas project powers about one in every five homes in Luzon. It’s important that we keep our lights on, that we have a constant supply of gas and in order to do that, we need to have very competent and financially strong operators.”
He asserted that “the government, through the DOE, needs to evaluate the transaction and ensure that it is legal and that the new operator is financially and technically competent and has the capability of running Malampaya and supplying electricity to our homes.”
Citing conditions laid down in the joint operating agreement signed by the members of the consortium operating Malampaya —including Shell, Chevron, and PNOC—Gatchalian underscored the need for a provision that “for the sale of shares to be finalized, the party or the transferer has to ensure that it gets all prior permits-approvals from the government.”
In late May, 2021, Cusi had been quoted in news reports as saying, “Once the transaction has been completed at the consortium level, it will still be submitted to the DOE for its review and approval in accordance with Presidential Decree No. 87 otherwise known as the Oil Exploration and Development Act of 1972 (PD87).
“For its part, the DOE will, accordingly and judiciously, evaluate the legal, financial, and technical aspects of the transaction, and its impact [on] the obligations of (the) consortium to the Philippine government according to the terms of SC38 and PD87,” Cusi was quoted saying then. PNOC Exploration Corp., a subsidiary of state-owned Philippine National Oil Company (PNOC), has a 10-percent interest in the Malampaya gas field.