SENATOR Francis Pangilinan wants to know why the prized Malampaya natural gas project went to the upstart Udenna Corporation when the government has the power to exert its stake over the country’s crucial energy asset.
During deliberations of the 2022 budget of the Department of Energy (DOE) almost midnight Tuesday (16 November 2021), Pangilinan asked concerned officials to explain government’s failure to exercise its right of first refusal, which would have given it the option to keep control of the natural gas field that provides 40% of Luzon’s energy needs.
“It is very disturbing to listen to the reason given why the Department of Energy did not consider taking or exercising its right of first refusal on the basis of a sweeping, general statement of negative facts and constraints,” Pangilinan said.
“We are given just a broad statement to justify the turnover to a private corporation of a billion-dollar worth of assets. This is incredulous. We deserve a better explanation,” he added.
Amid the controversy, the approval of the DOE budget and its attached agencies was deferred.
Energy officials were to present relevant documents and decisions justifying the sale to Udenna, minutes of the meetings related to the decision, and various services of contracts.
Pangilinan pointed out that the DOE cannot wash its hands off the Malampaya sale controversy since its secretary heads the board of directors of the Philippine National Oil Company-Exploration Corporation (PNOC-EC), which dealt with the matter.
Earlier, Energy Secretary Alfonsi Cusi said negative factors constrained the agency from pursuing its stake in Malampaya after Shell divested from the project.
Udenna of businessman Dennis Uy, a close associate of the president, holds 45% interest in the project after buying out American energy firm Chevron’s stake in 2019. It increased its stake to 90 percent this year when Shell Philippines Exploration B.V. decided to exit the gas field in a $460-million deal. PNOC-EC, meanwhile, holds 10%.
Uy is also a partner of the China National Offshore Oil Corp. (CNOOC), a Chinese state-owned commercial company, in a Liquefied Natural Gas terminal project in Batangas.
“Let’s look at the numbers, so we will completely understand the decision. It needs more justification,” Pangilinan said.
“What really is at stake here is our energy security and the interest of the Filipino people who have equal rights over the natural resources and wealth of our country,” he added.
Earlier, several business groups lamented that the sale to Udenna, which was incorporated in Singapore only September 2019, has placed the government at the losing end.
They said government may have given up tens in billions of pesos in revenues from the natural gas field. They said this was detrimental especially at a time when the state needs money as it deals with the impact of the Covid-19 pandemic.