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Spare Shell, Malampaya from ‘publicity stunts,’ solon urges Senate reelectionists

/ 12:06 AM November 08, 2021
Enrile warns of ‘looming’ energy crisis

Malampaya natural gas platform off northwest Palawan. (File photo by EDWIN BACASMAS / Philippine Daily Inquirer)

MANILA, Philippines — Surigao del Sur Rep. Johnny Pimentel urged reelectionist senators on Sunday to spare Shell Petroleum from their “publicity stunts” after it sold its operating stake, including the offshore Malampaya gas field, to the Udenna Corp. (UC).

Udenna Corp. is owned by Dennis Uy, a major campaign contributor of President Rodrigo Duterte.

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“We would urge our senators – especially those seeking to extend their terms in office in 2022, and who are eager to draw attention to themselves – to spare Shell from their publicity stunts,” said in a statement.

“If we make it difficult for foreign investors like Shell to get in and get out of existing petroleum service contracts, then nobody will help us develop our vast deep-water gas deposits that we need badly to meet our growing demand for electricity,” Pimentel warned.

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According to Pimentel, the reelectionist senators should instead address “more pressing issues, such as joblessness.”

The Philippine Statistics Authority earlier reported that the country’s unemployment rate surged to 8.9 percent in September, even as the government began easing COVID-19 restrictions.

Pimentel said that the country could not afford to send the “wrong signal” to would-be foreign gas developers “because we will surely need their help in the months ahead.”

“We will definitely need the likes of British Petroleum plc, Exxon Mobil Corp., Saudi Arabian Oil Co,. and Total Energies SE if we want to harness our other gas supplies beneath the West Philippine Sea,” Pimentel said.

The lawmaker added that he was not worried about Malampaya, which according to him, is already a mature field in a state of declining gas production at 20 years old.

The undeveloped Sampaguita gas filed some 250 kilometers southwest of Malampaya should be more of a concern, he added.

“There’s no question Sampaguita’s operator will eventually have to bring in a large and proficient foreign partner to help develop the field from zero to full production,” Pimentel said.

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“And we do not want all the political badgering around Shell’s Malampaya divestment to drive away prospective foreign investors that might be interested in farming into Sampaguita’s service contract,” he added.

Citing an independent assessment by Weatherford Petroleum Consultants, Pimentel said that Sampaguita, which lies in Service Contract (SC) 72 operated by Forum Energy Ltd., is believed to contain more gas reserves than Malampaya when the latter was first discovered in 1989.

“In Malampaya’s case, what is important is that the private parties to the transaction have guaranteed the safe and orderly transfer of operations, including the retention of the highly experienced workforce there,” Pimentel said.

“We want the new operator to quickly find ways – and drill a new well if needed – to further extend Malampaya’s productive life. This will not only assure us of more gas supplies for electricity but also more revenue for the national treasury,” Pimentel added.

Meanwhile, officials of the Department of Energy (DOE) previously told a congressional hearing that  Malampaya’s gas output, which supplies a significant portion of the country’s energy demand, would fall to just one-third of current production by 2024,

All this developed after Shell recently signed an agreement to sell its 100 percent stake in Shell Philippines Exploration B.V. (SPEX) to Malampaya Energy XP Pte Ltd, a subsidiary of Udenna Corp.

This means the Udenna now owns 90 percent of the project, having also earlier bought the shares of Chevron Malampaya LLC that was under Chevron Philippines Ltd.

The remaining 10 percent is held by the state-owned Philippine National Oil Co. Exploration Corp. (PNOC-EC).

On Oct. 19, some concerned citizens filed at the Office of the Ombudsman a graft complaint against Energy Secretary Alfonso Cusi and Udenna CEO Uy.

READ: Cusi, Dennis Uy slapped with graft raps for selling Malampaya shares to Udenna

The complainants alleged that Cusi and other employees of the PNOC-EC and other incorporators of Udenna, Chevron, Shell Philippines Exploration BV conspired to provide Uy’s company a huge chunk of the shares under the buyout.

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Hold liable officials involved in Malampaya share sale, DoE urged

Gatchalian to DOE: Justify Udenna’s acquisition of Malampaya stake

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TAGS: Dennis Uy, Department of Energy, DoE, Johnny Pimentel, Malampaya Natural Gas Project, Udenna Corp.
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