DOE used unaudited FS in approving Chevron-Udenna deal


The Department of Energy (DOE) has admitted that it used an unaudited financial statement of Udenna Group unit UC38 LLC in approving the Dennis Uy-led firm’s acquisition of Chevron’s 45% stake in the gas project.

In a statement to the media on Thursday, the DOE said “UC38 LLC submitted unaudited financial statements as of September 2020 with Available Working Capital amounting to USD177.421M, which appeared to meet its commitment of USD64.455M for [calendar year] 2020.”

However, Sen. Nancy Binay flagged Energy Sec. Alfonso Cusi during the Senate Committee on Energy’s hearing on Wednesday, stressing that the DOE should have not accepted unaudited financial statements in the first place.

“In view of the unaudited financial statements, UC38 LLC was required to submit its Bank Balances as of December 2020. UC38 LLC complied and submitted a Bank Balance Summary of USD72.283M. In addition to that, it also submitted a Bank Balance Summary of UCMPPL in the amount of USD 39.170M USD,” the DOE responded in its statement.

Udenna bought Chevron’s share in March 2020 for $565 million. The DOE approved the transaction last April.

The department is under the Senate’s intense scrutiny after learning that Malampaya Energy XP Pte. Ltd. (MEXP), the Udenna subsidiary that won the bidding to purchase Shell’s 45%, only had $100 (around Php5,000) in capitalization.

Udenna announced in May that MEXP bought Shell Philippines Exploration B.V. for $460 million, reportedly with financing from four foreign banks.