Gatchalian to DOE: Justify Udenna’s acquisition of Malampaya stake
MANILA, Philippines — Senator Sherwin Gatchalian on Friday called on the Department of Energy (DOE) to justify its decision approving the transfer of Chevron Philippines’ ownership in Chevron Malampaya LCC to Udenna Corporation (UC) Malampaya Philippines.
Gatchalian, Chairman of the Senate Committee on Energy, noted that UC Malampaya Philippines completed on March 11, 2020, its acquisition of Chevron Malampaya LLC, the holder of a 45% interest in Malampaya gas field project. Still, it was only on October 28, 2020, that the DOE was officially provided with the Malampaya share’s divestment documents.
“Prior to the DOE announcement on their approval of the sale, it is worthy to note that the Senate Energy Committee has sought the department’s submission of its legal basis in reviewing the transaction, whether there is a need for another issuance to clarify if these kinds of transactions would need executive approval or not, and their recommendations to the legislature on possible amendments on Presidential Decree (PD) 87,” Gatchalian said in a statement.
He recalled the DOE’s legal department telling the energy panel during its hearing last November that such transaction is governed by the agency’s circular, requiring an evaluation of the company’s technical, legal, and financial capacity.
PD 87 also requires the approval of the DOE on such transfer of shares in upstream petroleum ventures.
“There is a provision signed by the members of the consortium operating Malampaya (Shell, Chevron, and PNOC-EC) that says “for the sale of shares to be finalized, the party or the transferer has to ensure that they get all prior permits or approvals from the government.“ the senator further added.
Gatchalian then stressed the need for an explanation from the DOE.
“It bears stressing the need for an explanation from the DOE’s end on how they could justify their approval of the transaction,” Gatchalian said.
“This involves not just an ordinary asset. It demands a lot of experience, technology, and global connections. The oil and gas industry is a global business. The technical know-how is also required, and this is because we’re looking at the larger picture, which is the energy security of the country.” he added.
“The consumers are the primordial concern. We want to make sure that the consumers will receive 24/7 electricity at a least-cost manner. We have laws and regulations that govern all of these transactions, and those laws are meant to create a stable environment in the power sector,” he concluded.
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