Keep Malampaya on
In separate transactions, the Udenna group of Davao City businessman Dennis Uy negotiated for a 90 percent stake in the project through the acquisition of the shares of oil giants Shell and Chevron.
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Daily TribuneIn separate transactions, the Udenna group of Davao City businessman Dennis Uy negotiated for a 90 percent stake in the project through the acquisition of the shares of oil giants Shell and Chevron.
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When an adequate supply of electricity was crucial during the health emergency, the Department of Energy delivered, which is a reminder of the proactive leadership that is extremely needed now in rebuilding post-pandemic period.
Despite the backlash from the spread of Covid and obstructions inflicted by Senator Win Gatchalian, Senate energy panel head, the thrust for energy security did not wane with only a few instances of prolonged outages during the pandemic.
Loss of supply at that time means a life-and-death situation primarily for those trying to escape the clutches of the virus in congested hospitals at that time.
Some senators including Gatchalian, nonetheless, tried to make it difficult for the energy sector to keep up with the then-evolving challenges spawned by the vicious pathogen.
The emergency required a constant supply of electricity that could be best guaranteed by indigenous sources to prevent dependence on imports.
The energy panel chairperson blocked the progress of the Malampaya natural gas field as he questioned every transaction related to the project.
The continued intrusion of Gatchalian into the capital-intensive project applied pressure on the state-owned Philippine National Oil Co.-Exploration Corp. to freeze the purchase of the Shell operational deal.
Under an agreement among consortium members, they should give consent to the disposition of shares in the project.
In separate transactions, the Udenna group of Davao City businessman Dennis Uy negotiated for a 90 percent stake in the project through the acquisition of the shares of oil giants Shell and Chevron.
The clash over the patently private transaction threw off the schedule for the redevelopment of the project.
It was at that time that then Energy Secretary Al Cusi bared a P50 million offer for him to support PNOC-EC's exercise of its preemptive rights over the sale of the consortium's shares that will give Udenna an effective 90 percent control of the energy field under Service Contract 38.
Gatchalian wanted the contract to lapse and for PNOC-EC to take over the project in 2024 when the government assumes ownership of all the assets related to the project.
The new Malampaya controlling group, Prime Infra, now had to start from scratch in refurbishing the gas project and extend its life beyond 2027.
PNOC-EC, nonetheless, was offered the first refusal privilege on the Shell shares but did not avail of it since it failed to raise enough funds to match Udenna's offer.
The withholding of PNOC-EC's approval of the deal may even instigate an arbitration suit and expose the state firm and eventually the government. to liability for damages, according to an industry expert.
The lack of rules on the sale of shares in key energy projects was exploited in the Senate probe to block the Shell shares sale that would have effectively placed the operational control of the project to Udenna.
Several issues still needed to be addressed and should be confronted head-on and quickly because of the impending end of the SC 38 contract in 2024 and the expected depletion of Malampaya's gas reserves by 2027.
An industry expert said due to the delays caused by Gatchalian, the window of opportunity for Malampaya, the only large-scale indigenous source of fuel, almost shut close.
