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IBP calls for transparency on Malampaya project transfer of shares

/ 03:50 PM November 24, 2021
Malampaya Energy ramps up exploration and production

The Malampaya Deep Water Gas-to-Power Project is located 50 kilometers offshore Northwest Palawan. It is the only producing natural gas asset in the Philippines.

MANILA, Philippines — The Integrated Bar of the Philippines (IBP) on Wednesday called for transparency in the transfer of shares for the Malampaya gas project.

In a statement, the IBP also called on the Department of Energy (DOE) to rescind its approval of Chevron’s transfer of its 45 percent interest in Malampaya to Udenna Corp.’s subsidiary, UC Malampaya, and to hold in abeyance its approval of Shell Philippines Exploration’s (SPEX) transfer of its 45 percent to another Udenna subsidiary, Malampaya Energy XP.

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“The assignment of interests, which will ultimately enable Udenna to take over the Malampaya facility is allegedly detrimental to national security and interest,” the IBP said.

The lawyers’ group said it views with “deep apprehension and concern” the latest developments surrounding Chevron and SPEX.

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Udenna Corporation is owned by Davao-based businessman Dennis Uy, a campaign donor and known ally of President Rodrigo Duterte.

“The DOE must exercise transparency in evaluating transactions in relation to critical energy resources and ensure that developers are financially and technically competent. In this way, the government can forge a sustainable balance in creating a stable investment climate and establishing good governance practice in the management of the country’s energy resources,” the IBP stressed.

Meanwhile, the IBP also called on the DOE to thoroughly review, study, and consider the extension of Petroleum Service Contract (SC) No. 38 in favor of the original Malampaya consortium—SPEX, Chevron, and state-owned Philippine National Oil Corporation-Exploration Corporation.

“The extension will also incentivize the original consortium to continue operating SC 38 with their proven technical and financial track record in petroleum exploration and development in contrast to a buyer with no proven experience in operating a highly-technical and capital-intensive operation,” the IBP added.

If Chevron and SPEX will proceed with the divestment of their interests in Malapaya, the IBP said the PNOC should “exercise its right to match any offer laid before Chevron and SPEX under the JOA (Joint Operating Agreement).”

The IBP believes that PNOC being a state-owned petroleum company has the mandate and means to raise funds for acquiring the controlling interests in Malampaya.

It further pointed out that a PNOC takeover of SC 38 will be financially advantageous to the government since Malampaya is a producing field with existing infrastructure for other petroleum discoveries.

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“In view of this, the IBP calls on Philippine legislators to review and amend the possible legal restrictions imposed by various legislations on PNOC-EC as a government-owned and controlled corporation, such as Republic Act No. 9184, ‘Procurement Law,’ and RA 10149, ‘the Government-Owned and Controlled Corporations Governance Law,’ the group said.

The IBP also urged the Office of the Ombudsman “to expeditiously resolve” the complaint against the officials of the DOE, Udenna, Chevron, SPEX, and PNOC “in light of the fact that this matter is of utmost economic urgency since the Malampaya field is nearing its depletion and DOE appears to have no viable alternative to replace a major source of power for Luzon.”

The IBP likewise said it supports the Senate Committee on Energy’s investigation “on the interest divestments to the Udenna subsidiaries.”

RELATED STORIES

PH at losing end of Malampaya deal with Uy, say biz groups

Probe of Dennis Uy’s acquisition of Malampaya sought

/MUF

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TAGS: Dennis Uy, IBP, Integrated Bar of the Philippines, Udenna Corporation
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