Dennis Uy breaks silence on Malampaya deal, slams biz group
MANILA, Philippines — Davao entrepreneur Dennis Uy broke his silence on the Malampaya deal, answering allegations leveled against him after his company, Udenna Corporation, acquired 90 percent of the offshore gas field in a two-tiered asset deal.
In a letter to the Board of Trustees of the Makati Business Club (MBC), Uy underscored that Udenna is available to address all issues raised concerning the Malampaya project.
Uy also slammed the business group, questioning it as to why it never contacted him regarding the Malampaya deal.
“If the MBC felt strongly about the issues surrounding the business deal, that it even went as far as to lend its esteemed name to call for a Senate probe, then we should have been invited to meet with the MBC leadership to shed light on the concerns,” said Uy.
“Instead, we had to find out from various stories in the media,” he added.
On Nov. 11, the MBC along with seven other business groups urged the Senate to investigate why the government did not exert its right over the Malampaya gas project when Uy — who it did not name but referred to as a “private purchaser — bought a controlling stake in the critical energy asset despite having no prior experience in gas exploration.
According to Uy, however, those who managed the Malampaya gas field under Chevron and Shell remained unchanged. Therefore, Udenna has no need to take on additional partners for the operation of the gas field.
“Note that acquisition of both the Chevron and Shell shares in Malampaya were conducted at the parent company level with no change in the legal entities participating in the SC38 consortium,” said Uy.
“Thus, it is the very same personalities and experts from Chevron and Shell who will manage and operate Malampaya,” he added.
Uy also bared that Udenna, with the combined subsidiaries of the UC Malampaya Philippines and Malampaya Energy XP, had a capital of $191 million when it acquired the shares of Chevron and Shell.
“The documents of these companies were certified at the Philippine consulate in Singapore and have been shared with the relevant Philippine authorities,” said Uy.
Uy also remained firm that Udenna’s acquisition of the Chevron and Shell’s shares was legal, explaining that the transactions are private share sales conducted at parent company level with no change in the legal entities participating in the SC38 consortium nor any transfer of any rights or obligations in the service contract.
“As such, DoE approval is not required as has been the practice for the previous transfers of interest at the parent company level,” said Uy.
“The clear language and intent of Section 16.4 of the SC38 Agreement and Section 1 of the DOE Circular executed under PD No.87 do not apply to these transactions,” he added.
He then assured that the government will continue to receive 60% of the proceeds from Malampaya without investing any funds or taking on any of the risks.
“The SC38 consortium partners are the service contractor and divide the remaining 40% of the proceeds in proportion to their shareholdings,” said Uy.
“As PNOC-EC (Philippine National Oil Co. Exploration Corp) holds a 10% of the SC38 consortium, the Government’s total combined share of the proceeds from Malampaya is 64%,” he added.
The Davao businessman then urged the MBC to meet with him, instead of calling for a legislative probe on the controversial deal.
“Instead of calling on a legislative probe that will take up the precious time of our Senators who should be focusing on the 2022 budget, arguably an important legislation of Congress, a simple meeting with myself and our esteemed MBC leadership would have easily addressed these allegations and concerns,” Uy said in the letter.
Shell recently agreed to sell its stake to Malampaya Energy XP Pte Ltd, a subsidiary of Udenna Corp.
This means the Udenna is set to own 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 currently held by 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.
Complainants alleged that Cusi and other employees of the PNOC-EC and other incorporators from 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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