Connect with us


DoE’s Malampaya sale review still on — Cusi

Based on our initial findings, the deal is okay. There is no red flag that we are seeing on the legal and technical side.



Several financial issues are still hounding Dennis A. Uy’s acquisition of a 45 percent stake in the $4.5-billion Malampaya natural gas field through his Malampaya Energy XP Pte. Ltd.

The Department of Energy (DoE) is not ringing the alarm bell just yet, however.

In an exclusive Daily Tribune interview on Thursday, Energy Secretary Alfonso G. Cusi said the financial standing of the company, which lawmakers recently described as “questionable,” is “not something to be alarmed at”.

“Based on our initial findings, the deal is okay. There is no red flag that we are seeing on the legal and technical side,” Cusi told Daily Tribune.

“On the financial side, we are still carefully reviewing it. They are saying that the capitalization of the company is only P5,000 or whatever, but that’s not also something to be alarmed at,” he added.

Cusi noted that the DoE is more concerned about Malampaya Energy’s capabilities to pay off debts.

“I can name a company that has a billion capital but if we look into it closer, where does the billion capital goes? It’s already gone,” he said.

The DoE has yet to finalize its review of the transaction, but Cusi said his team is expediting the process so that the deal will be cleared before the polling period starts — a busy season as Cusi also heads the ruling party PDP Laban.

Uy’s Malampaya Energy, a Singapore-incorporated firm, is buying the 45-percent stake of Shell Philippines Exploration B.V. (SPEX) in the Malampaya venture.

According to data from Singapore’s Accounting and Corporate Regulatory Authority (ACRA), the company has only about 100 shares, while the paid-up capital amounted to only $100 or approximately P5,000.

In a recent public hearing of the Senate Committee on Energy, Senator Sherwin Gatchalian questioned the capacity of Malampaya Energy to run the gas field amid mounting debt load.

Citing data from the recent audited financial statement of its parent firm Udenna Corp., Gatchalian revealed that the company’s debt ballooned by 324.2 percent in just three years.

Based on the computation of the Senator’s office, Udenna Corp. incurred P28.48 billion debt in 2016, which exponentially grew to P92.33 billion in 2019.

Shell’s sale of its interest to Malampaya Energy has a base consideration of $380 million, with additional payments of up to $80 million between 2022 to 2024 contingent on asset performance and commodity prices.

Shell is the second multinational giant to exit from the Malampaya venture. The first to give up its share was American firm Chevron Corporation, which sold its 45-percent stake in the project to UC38 LLC — another unit of Udenna Corp. for $565 million.

The new Malampaya joint venture partners are now just Udenna and state-run Philippine National Oil Company-Exploration Corporation, which holds the remaining 10 percent of the project.

Malampaya natural gas field has been operating since 2001 and has contributed over $10 billion in revenues to the Philippine government to date.

According to the latest DoE data presented by Undersecretary Felix William Fuentebella in an economic forum on Wednesday, the expected output from Malampaya this year is at 2,313 megawatts (MW).

It is anticipated to decline to 2,156 MW by 2022, 1,813 MW by 2023, and down to 1,563 MW by 2024.