Gatchalian urges DOE to be transparent on SPEX-Udenna deal in Malampaya

Gatchalian urges DOE to be transparent on SPEX-Udenna deal in Malampaya

By Ernie Reyes

MANILA — Senator Win Gatchalian urged the Department of Energy (DOE) to lay its cards on the table in its ongoing review process that will be the basis for approving or disapproving the sale of the 45% operating interest of Shell Philippines Exploration B.V. (SPEX) in the Malampaya gas field to Udenna Corporation’s Malampaya Energy XP Pte. Ltd.

“Napaso na tayo sa first transaction. The DOE approved the first transaction and then, later on, said that the law is insufficient,” said Gatchalian referring to the sale of the $565 million-worth shares of stocks of Chevron Malampaya LLC to another Udenna unit UC Malampaya Pte. Ltd. which was approved by the DOE despite admissions of gaps in the law.

“The process should be very clear to us. What circular is the DOE using? Is this circular sufficient or not? These are the same questions we asked in the past Senate hearings,” Gatchalian said.

Under the sales purchase agreement, the SPEX-Udenna deal requires the approval of the DOE, unlike in the case of the Chevron-Udenna deal which DOE Assistant Secretary Gerardo Erguiza Jr. said is not required. He reiterated the position of the department that there’s insufficiency of legal basis or inapplicability of DOE’s department circular 2007-04-003 in subjecting the Chevron-Udenna deal to prior approval by the government. The said circular prescribes the guidelines and procedures for the transfer of rights and obligations in petroleum service contracts under Presidential Decree 87, the basis for evaluation of such transactions.

“Hahayaan ba natin na mapasakamay ang Malampaya ng kumpanyang maraming utang? Walang track record sa oil exploration and development ngunit dahil nakapangutang sa mga bangko ay nagawang mabili ang mga binebentang interes sa Malampaya,” Gatchalian stressed.

Reports said that SPEX sold its 45% stake in Malampaya to Malampaya Energy at $380 million, with additional payments of up to $80 million between 2022 to 2024 contingent on asset performance and commodity prices.

Gatchalian underscored the need for the DOE to be transparent in handling the SPEX-Udenna deal because what is at stake is the country’s energy stability as almost four million households and almost close to about 30% of the Luzon grid is dependent on Malampaya. (ai/mtvn)

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