Probe Mañalac’s JMSU
“The Supreme Court struck down the deal since the Constitution only allows Filipino companies to exploit the country’s natural resources.
Arguments about the government incurring losses from the natural gas project in Malampaya are coming from a conflicted source and have no value at all.
Former Philippine National Oil Co. president Eduardo Mañalac reprising a previous role of creating noise to frustrate the energy project and usher in a new group of investors is not new to misdeals particularly one that he had a hand on.
The undertakings that he brokered were not beneficial to the government.
He was dismissed from the state oil firm during the term of former President Gloria Macapagal-Arroyo in 2006 for undisclosed reasons.
The dismissal, however, was handed to him after a series of questionable deals.
He sought the sale of PNOC-Exploration Corp.’s five of the 10 percent share in the Malampaya consortium to LG International Corp. of Korea for $140.5 million or about P7 billion.
Estimates made by the then Privatization Council showed that the price should have been $175 million or P8.7 billion.
The council thumbed down the proposal of Mañalac as it would have thrown away a jewel of the nation’s assets.
Manalac said his decision to sell the Malampaya stake in 2005 was prompted by external forces.
“The reason given to sell the PNOC-EC share at the time was that, if you remember, PNOC paid a hundred plus million for the 10 percent (stake). So what the government was saying was we have to pay that. We have to raise the money,” said Mañalac, then-concurrent PNOC EC chief.
The government was then privatizing assets to fund the budget.
Much earlier, Mañalac was involved in another project in the Sulu Seas involving Mitra Energy, a Bermuda company.
The Department of Energy, which looked into the financial capability of Mitra Energy, found that it only has $10 million for a farm-in agreement for Service Contract 56 that covers the Sulu Seas.
Its working capital of $10.184 million then was not even enough to cover the required preliminary exploration expenses which are $1.6 million for the 2D seismic probe and another $12.3 million for the 3D seismic inspection.
The former Department of Energy undersecretary’s biggest coup should have been Joint Maritime Seismic Undertaking or JMSU which involved PNOC-EC, China National Offshore Oil Corp., and Vietnam Oil and Gas Corp. all of which are state-owned, allowing seismic work on a 142,886-square-kilometer area in the West Philippine Sea.
Mañalac admitted packaging the deal which he claimed to have done to follow “government orders and directives concerning a policy of energy independence.”
The Supreme Court struck down the deal since the Constitution only allows Filipino companies to exploit the country’s natural resources.
Based on the latest estimates of the Department of Energy, the gas field near Malampaya is estimated to have about 210 billion cubic feet of gas. Compare that volume to the less than the estimated 1 million cubic feet of gas that remains in the existing wells.
The instant Malampaya critic surfaced as part of a campaign that originates in New York to scuttle the deal.
A multimillionaire Filipino-American had sought from US Securities and Exchange Commission to probe the sale of Chevron shares in Malampaya.
The hypocritical groups led by Mañalac would hardly be the source of moral suasion when it comes to upholding the interest of the government and the benefits of the nation in key government projects.
Mañalac should instead be investigated for spearheading the JMSU which was a patent violation of the Charter, as indicated by the recent SC decision.
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