Quantcast
Latest Stories

In The Know: The Malampaya Gas Project


Malampaya funds represent the royalties that the government collects from the Malampaya gas project in Palawan.

Started in 2002, the $4.5-billion project involves the extraction of natural gas from the waters off Palawan. It is operated by Shell Philippines Exploration B.V. and Chevron Malampaya LLC, which holds controlling shares in the project. PNOC Exploration Corp. holds a minority share.

The service contract provided a production-sharing scheme in which the government gets 60 percent of earnings from project operations, after deducting certain charges.

Citing its territorial jurisdiction over the project, the Palawan government demanded 40 percent of the proceeds as provided for under the Local Government Code.

However, the national government under the Arroyo administration contended that the project’s location was beyond Palawan’s territory and instead was within the national territory.

The dispute led the provincial government to file a case in the regional trial court in Palawan. The court ruled in favor of Palawan but this was reversed by the Court of Appeals (COA) in 2006, prompting the local government to bring the matter to the Supreme Court.

The court, meanwhile, ordered to put the disputed local government share in escrow until the case was resolved.

Pending the final resolution of the case, the Palawan and the national governments signed an interim agreement in February 2005 to jointly spend half of the province’s 40-percent share mandated by the Local Government Code. The interim agreement was set to lapse on June 30, 2010, or until the court made its final decision.

In December 2007, Malacañang issued Executive Order No. 683, which provides for a provisional implementation agreement wherein half of the 40 percent of the proceeds of the project could be used for development projects in Palawan. The release of the funds is subject to certain conditions.

The executive order also provides that the money be released based on the directive from the Office of the President or Palawan, and a Bureau of Treasury certification on the availability of funds from half of the 40 percent being claimed by the province.

 

Pork barrel

The scheme was, however, criticized as a pork barrel appropriation for the province’s top political leaders.

Slain broadcaster and environmentalist Gerry Ortega was a known critic of the handling of the revenue from Palawan’s share of the natural gas from Malampaya.

As part of the “interim” agreement, the national government released a total of P2.9 billion between 2005 and 2010 to Palawan.

In its 2010 report, the COA said that P77.2 billion of the Malampaya funds had been lying “idle” for eight years while P19.4 billion was released to national government agencies and went mostly to projects unrelated to energy development.

 

Graft charges

In November 2011, the COA recommended the filing of graft and criminal charges against former Palawan Gov. Joel T. Reyes and members of the provincial bids and awards committee under his administration for alleged irregularities in the use of nearly P3 billion in Malampaya funds.

The COA report alleged that the Reyes administration had favored certain private contractors to corner over 200 infrastructure projects funded by royalties from Malampaya, ranging from day care centers that cost a total of P30 million to a reclamation project that cost over P400 million.

Reyes, along with his brother, Coron Mayor Mario Reyes, is facing murder charges in relation to the killing of Ortega in 2010. The former governor is believed to have fled the country. Inquirer Research

Source: Inquirer Archives


Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter


Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: environment , Gerry Ortega , Graft and Corruption , Infrastructure projects , Joel Reyes , Malampaya Natural Gas Project , Palawan




Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement
  1. 12 senators on Napoles ‘pork’ list, says Lacson
  2. Save the queen? Aide takes fall for Enrile, Gigi Reyes
  3. Palace prepared to charge its allies
  4. Senator’s kickback from pork bigger than those of Enrile, Estrada, Revilla – Lacson
  5. Napoles turnaround alarms whistle-blowers
  6. What Went Before: Malacañang allies alleged involvement in pork scam
  7. Napoles spills beans on Enrile, Estrada, Revilla – De Lima
  8. Timeline: Napoles tell-all
  9. HK apology: Why Estrada and not Aquino?
  10. Cedric Lee’s cohort flies out of PH despite look-out order – De Lima
  1. Napoles spills beans on Enrile, Estrada, Revilla – De Lima
  2. 12 senators on Napoles ‘pork’ list, says Lacson
  3. Gigi Reyes pins blame on aide
  4. Estrada: Gigi Reyes won’t testify vs JPE
  5. Bernice Lee arrested by NBI team
  6. Enrile chief aide back in PH ‘to face charges’
  7. Cedric Lee’s cohort flies out of PH despite look-out order – De Lima
  8. Suspect in Vhong Navarro’s mauling wants to turn state witness – De Lima
  9. Reckless driver endangered lives of Aquino, entourage–report
  10. Lawyer: Napoles ‘will tell all’
  1. MRT passengers pass the hat for 6-year-old Ashley
  2. Rookie, lady cops lauded for quick response to MOA heist
  3. Napoles spills beans on Enrile, Estrada, Revilla – De Lima
  4. Malaysia averts another air tragedy; pilot lands troubled plane safely
  5. Revilla says he was joking; Lacson stands by his story
  6. Revilla ‘consulted’ Lacson on how he evaded arrest
  7. 12 senators on Napoles ‘pork’ list, says Lacson
  8. Gigi Reyes pins blame on aide
  9. Cudia, dismissed for lying, got 99% in conduct
  10. Kim Henares needs a reprimand, says Cayetano
Advertisement

News

  • Obama: US will defend Japan vs China
  • Santiago accuses Lacson of fronting for Enrile, Gigi Reyes
  • Name names, Lacson told
  • Ukraine FM: We are ready to fight Russia
  • Slain officer’s ‘diagram’ rocks PNP
  • Sports

  • Sharapova advances to Stuttgart quarterfinals
  • Galedo caps ride of redemption
  • Beermen, Express dispute second semis slot today
  • Lady Agilas upset Lady Bulldogs in four sets
  • NLEX roars to 7th D-League win
  • Lifestyle

  • How Jing Monis Salon gave Krissy the pixie
  • Want to be a supermodel? Work on your inner beauty, says Joey Espino
  • Denims that keep you cool–literally
  • 10 essential summer skin savers
  • Here’s your visual guide to all things cool, hot in summer fashion
  • Entertainment

  • Kristoffer Martin: from thug to gay teen
  • Has Ai Ai fallen deeply with ‘sireno?’
  • California court won’t review Jackson doctor case
  • Cris Villonco on play adapted from different medium
  • OMB exec’s assurance: We work 24/7
  • Business

  • Bangko Sentral readies new bank lending rules
  • Gaming stocks gain, PSEi eases on profit-taking
  • Cebu Pacific flew 3.74M passengers as of March
  • Corporate bonds sweeteners
  • Professionals in the family business
  • Technology

  • Vatican announces hashtag for April 27 canonizations
  • Enrile in Masters of the Universe, Lord of the Rings?
  • Top Traits of Digital Marketers
  • No truth to viral no-visa ‘chronicles’
  • ‘Unlimited’ Internet promos not really limitless; lawmakers call for probe
  • Opinion

  • Editorial Cartoon, April 25, 2014
  • No deal, Janet
  • Like making Al Capone a witness vs his gang
  • MERS-CoV and mothers
  • A graduation story
  • Global Nation

  • Afghan hospital guard kills 3 American doctors
  • Career diplomat is new PH consul general in Los Angeles
  • US4GG: Aquino should ask Obama for TPS approval, drone technology
  • Complex health care system for California’s elderly and poor explained
  • Tiff with HK over Luneta hostage fiasco finally over
  • Marketplace
    Advertisement