Bar association calls for cancellation of Udenna’s Malampaya acquisitions
THE Integrated Bar of the Philippines (IBP) said Wednesday that the Department of Energy (DoE) must cancel the sale of a 45% stake in the Malampaya project to Udenna Energy Corp. and delay final approval of another 45% sale this year.
“While the Senate investigation is ongoing, (we) call on the DoE to rescind its approval of (Chevron Malampaya LLC’s) transfer of its 45% interest in Malampaya to Udenna subsidiary UC Malampaya (Pte Ltd.), and to hold in abeyance its approval of Shell Philippines Exploration BV’s (SPEx) transfer of its 45% to another Udenna subsidiary, Malampaya Energy XP,” the IBP said in a statement.
It cited the possibility of a buyer with limited technical expertise inviting foreign parties with interests that are hostile to the Philippines to participate in the Malampaya project.
“… a buyer who is not technically and financially capable of operating Malampaya may tap companies from foreign countries having adverse interests in the West Philippine Sea dispute,” the IBP said, adding that such a move will be a threat to the Philippines’ strategic energy resources.
The Senate Committee on Energy is currently reviewing Udenna’s Malampaya deals. The DoE has said that such investigations are delaying the timelines of consortiums participating in developing Philippine energy resources.
Senator Ana Theresia N. Hontiveros filed a resolution Friday urging the Senate Blue Ribbon Committee to investigate the acquisition of the stakes in Service Contract 38 (SC 38), the resource block that includes the Malampaya gas field.
The DoE told BusinessWorld Tuesday that Ms. Hontiveros’s resolution is “speculative.”
In October, a criminal complaint was filed before the Ombudsman against officials of the DoE, Udenna, Chevron Malampaya LLC, SPEx, and the Philippine National Oil Co.-Exploration Corp. (PNOC-EC), which owns 10% of the Malampaya project.
The complaint was filed by concerned citizens alleging that Udenna subsidiaries are financially and technically unqualified to operate Malampaya.
The DoE and PNOC-EC were also alleged to have neglected the option to match the Udenna offer in the buyout of the Chevron Malampaya stake.
The IBP then urged the Office of the Ombudsman to “expeditiously resolve” the criminal complaint, citing the urgency of the matter as the Malampaya field approaches commercial depletion.
BusinessWorld asked Udenna Energy Corp. to comment, but it had not replied at the deadline. The DoE declined to comment.
Malampaya natural gas, which is piped from Palawan to Batangas, fuels power plants servicing 30% of Luzon’s energy needs. The Philippines is expected to rely on imports when the field runs out of gas.
In 2019, Dennis A. Uy’s Udenna Corp. through its subsidiary UC Malampaya acquired Chevron Malampaya LLC’s share in the project for nearly P28.6 billion. In April, the DoE approved the deal.
In May, another Udenna unit, Malampaya Energy XP, bought out SPEx, which had held a 45% operating interest in the Malampaya gas field, for P23.2 billion. — Marielle C. Lucenio