Equal treatment prevented the Department of Energy (DoE) from delving too deep into the costly transactions that are expected to lead to the eventual control of Davao businessman Dennis Uy of the Malampaya natural gas project.
Taking out the huge cost, there was nothing in the deal that makes it different from other transactions that happen everyday in the world of business.
If the same factors that prompted the probe is used, many other private deals would have to be subjected to the Senate shakedown.
The deal, which is worth more than $1 billion and will buy out the shares of Chevron Malampaya LLC and Shell Philippines Exploration BV, has been under scrutiny of the Senate. Senators have been issuing sound bites that are too similar to campaign pitches such as “government losing a golden chance in running the natural gas business,” or that “the Department of Energy bended rules to favor the Uy companies.”
According to Energy Secretary Alfonso Cusi, the entity represented by Chevron as partner in the Malampaya project did not change despite the $565 million sale of shares that gave UC Malampaya Philippines a 45 percent stake in the project.
“There are new stockholders but the entity comprising the consortium did not change,” according to Cusi.
He added that “the only thing that changed is the shareholders, but the company remained the same so the government can do nothing about the transaction.”
When Chevron sold its ownership, the government was not privy to the number of shares, their price, the payment, and the terms to it.
Chevron reported to DoE a change in ownership for its part in the consortium that remained intact.
“While we were not privy to the transaction, still the group of Dennis Uy submitted to the DoE its financial documents. The partners in Malampaya did not change; in fact, the financial capability of Chevron which was renamed UC 38 increased its financial capability.”
While it would need somebody to take a deep breath before fully comprehending the details of the transaction, the government has little involvement in it since Cusi said the “sale that happened was a private transaction.”
It would be a clear instance of overreach, however, if the Senate will insist on turning the deal inside out through what it insists as its function to hold “investigations in aid of legislation.”
Cusi wonders, “If Dennis Uy weren’t the one buying Chevron Malampaya, would it be an issue?”
“We can’t do anything about it. There was a sale between private companies. That is a private transaction,” Cusi reiterated.
In the television interview, Cusi hinted that big business which was evidently outbid by the Dennis Uy group in Malampaya is now trying to thwart the deal.
The group that Cusi was referring to even tried to offer 10 percent partner Philippine National Oil Co.-Exploration Corp. to provide the financing to allow the state firm to buy out either Chevron or Shell.
Later on, the business group is expected to turn around and reimburse the money that it advanced through an ownership transfer.
Cusi said the DoE did not allow the underhanded move, which would be considered the reverse of the government’s privatization policy.
The senators should be asked if they are more competent in determining the integrity of the Malampaya deals than the parties in the transaction, particularly the two oil giants which are as shrewd as hell.