Hontiveros questions Dennis Uy’s firm buying spree, takeover of PH fossil energy assets

Hontiveros questions Dennis Uy’s firm buying spree, takeover of PH fossil energy assets

By Ernie Reyes

MANILA — Senator Risa Hontiveros believes it is “very puzzling and
alarming” that a single private entity, Udenna Corporation, was
allowed to acquire almost all of the Philippines’ strategic fossil
energy assets in the West Philippine Sea (WPS).

Hontiveros says the company, led by a campaign donor of President
Rodrigo Duterte, seemed to have secured a “mind-blowing” number of
favorable government deals in recent years. Udenna’s chairman is
Dennis Uy, a campaign donor, and friend of President Duterte.

To look into this, Hontiveros has filed Proposed Senate Resolution No.
950, urging the Senate Blue Ribbon Committee to look into the
“propriety” of Udenna’s takeover of the said assets in the WPS, as
well as its impact on the nation’s security and economic interests.

“By allowing Udenna to control both the Malampaya Project and its gas
pipeline, as well as the fossil energy resources in the Recto Bank,
the Department of Energy (DOE) and the Philippine National Oil Company
(PNOC) not only deprived the Philippine government of a substantial
source of revenue, but also allowed private – and possibly foreign –
interests an undue advantage over the nation through the possession of
its vital strategic assets,” Hontiveros said.

Hontiveros noted that in 2019, Udenna acquired a 45 percent share in
the Malampaya Deep Water Gas-to-Power Project from Chevron Malampaya
LLC for USD 545 million. It later entered into an agreement with Shell
Philippines Exploration B.V. to acquire another 45 percent of the
project for USD 380 million.

The DOE also recommended the award to Udenna of two service contracts
covering areas in the Recto Bank – an underwater formation said to
contain most of the oil and natural gas in the West Philippine Sea.

The senator pointed out that Udenna paid for the Malampaya shares not
with existing assets but with loans from various banks. In return,
Udenna is set to earn a projected income of nearly USD 1.2 billion
from its Malampaya shares.

Hontiveros flagged that state-owned PNOC may have allowed Udenna’s
“buying spree” by not exercising its right of first refusal – which
gave PNOC the right to have the first opportunity to purchase
Malampaya shares owned by Shell and Chevron.

“If the government had matched Udenna’s offer, it would have been
guaranteed a net income of around USD 275 million for around four
years, until the existing wells are depleted by 2024. By failing to
exercise its right of first refusal, the government was deprived of
hundreds of millions of dollars which we could have used to meet the
people’s needs,” Hontiveros said.

“The Malampaya project is very important to the daily lives of
Filipinos. We should make sure that no law was broken, and that the
public’s interests are not prejudiced in transactions related to
these vital national assets,” Hontiveros concluded. (ai/mtvn)

Leave a Reply