Despite lacks legal basis, DOE approves Chevron-Udenna deal – Gatchalian

Despite lacks legal basis, DOE approves Chevron-Udenna deal – Gatchalian

By Ernie Reyes

MANILA — Senator Win Gatchalian chastised energy officials for
approving the sale of Chevron Malampaya’s 45% stake in the Malampaya
gas field to Udenna Malampaya LLC amid their own admission that there
was “insufficient foundation” of legal basis to do so.

Such claim was made after Gatchalian asked officials of the Department
of Energy (DOE) if they stand by their evaluation of the financial and
technical capabilities of Udenna Corporation’s unit that acquired the
stake of Chevron.

“I’m discouraged by the fact that you admitted that there is
insufficient foundation for legal basis, yet you pursued the
recommendation and ultimately the DOE secretary approved it. So,
there’s insufficient foundation on a business that is worth $500
million that supplies 3.7 million households and powers 27% of our
generation in Luzon. Such an important asset was sold to a company
that, based on your findings, is unqualified,” said Gatchalian.

During last Tuesday’s hearing, the Senate Energy Committee Chairperson
pointed out that such position by the DOE’s Energy Resource
Development Bureau – the group that assessed Chevron’s transfer of its
stakes to Udenna’s UC Malampaya Philippines Pte. Ltd. – has not been
articulated to the committee in any of the submitted documents.

“So, kayo-kayo lang ang nakakaalam nyan in other words,” Gatchalian
noted to which he was given an affirmative answer by DOE-ERDB Director
Cesar de la Fuente.

Based on the assessment of DOE officials who reviewed and recommended
the approval of the transaction, they said that they almost did not go
through evaluating UC Malampaya technically because the transaction
involved only the sale of shares and the second party remains to be
the same company with the same set of employees and technical experts.

What even made the senator more disappointed during the Senate hearing
was when DOE officials showed in their presentation that the technical
and legal aspects of UC Malampaya have been evaluated but suddenly
changed the name to UC38 when it needed to be financially evaluated.

“You evaluated the technical and legal aspects of UC Malampaya pero
pagdating sa financial aspect, naging UC38 na. Kasi hindi pumasa si UC
Malampaya sa financial evaluation,” said Gatchalian.

“To be honest about it, what I am getting here is that you legitimized
an illegitimate transaction. Parang this transaction is not qualified
pero pinilit ninyo to be qualified and legitimized it. That was a
clear violation in the transaction. So, why despite the violation,
your department approved this transaction?” Gatchalian asked the DOE.

The sale was finalized in March last year. (AI/MMTVN)

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