Despite controversies over Udenna Corporation’s purchase of Chevron’s 45% stake in the Malampaya gas-to-power project, Sec. Alfonso Cusi said that the Department of Energy (DOE) sees no “violation” in the transaction, which happened back in March.
Senators led by Sherwin Gatchalian, who chairs the upper chamber’s energy committee, pointed out in a hearing last November that the Chevron-Udenna deal had no prior approval by the DOE. Gatchalian earlier pointed out that Udenna must prove its technical capability to run the project.
In the same hearing, DOE officials indicated that the US$565 million (Php27.4 billion) deal is “voidable” should it discover any lapse committed by both parties.
Cusi qualified, though, that his department has yet to finalize all evaluations of the documents submitted by Chevron and Udenna. The DOE is also probing if the documents are in line with the provisions of Service Contract (SC) 38, which covers the Malampaya project, as well as with government policies.
The energy chief likewise emphasized that the DOE wants to be careful, as it is looking after public interest and that the transaction should not compromise its public service component.
SC 38 is set to expire in 2024, while Malampaya’s reserves are said to last until 2027. Udenna, owned by Davao-based magnate Dennis Uy, is also pursuing the other 45% being sold by Shell Philippines Exploration B.V. in a reported three-way toss-up with the MVP Group of Manny V. Pangilinan and San Miguel Corporation of Ramon Ang. The government, through PNOC Exploration Corporation, owns the remaining ten percent.