Two officials of the Department of Energy (DOE) gave conflicting answers to a question on the agency’s process of approving Udenna Corporation’s acquisitions in the Malampaya gas-to-power project.
Based on a Manila Bulletin report, Energy Usec. Donato Marcos said that the DOE approves the acquisition once the sale is already consummated by relevant private parties in the transaction, particularly citing Department Circular DC2007-04-0003 as basis.
Marcos was responding to a query raised by Bayan Muna Rep. Ferdinand Gaite during the House Committee on Appropriations’ hearing last week on the DOE’s budget for 2022.
However, DOE-Energy Resource Development Bureau Director Atty. Cesar De La Fuente III stressed that the same circular provides that the agency reviews the documents before the sale is finalized.
Gaite then pointed out that the Energy officials seem to be “clueless” on the approval processes, as these apply to Chevron and Shell’s sales of their respective 45% interests in Malampaya.
De La Fuente reiterated that the DOE had approved the sale of Chevron’s 45% to Udenna in March 2020 and that the agency is reviewing the transaction with Shell, which took place last May.
Based on the outcome of previous congressional probes, the DOE simply interceded to approve the $565 million Chevron-Udenna transaction after it was finalized and payments were already settled.
As for the $460 million Shell-Udenna deal, the DOE already required the documents’ review and the parties’ respective compliances before reaching financial closing, which is targeted by the end of the year.
Congress instructed the DOE to submit the documents that served as basis for its approval of the Chevron-Udenna transaction.