Amid the ongoing debate over Udenna Corporation’s impending takeover of the Malampaya gas facility, the Department of Energy (DOE) urges Congress to revise Presidential Decree (PD) 87 or the Oil Exploration and Development Act of 1972.
“It is high time that Congress introduce remedial legislation through amendments or even revise the entire charter governing the upstream industry, PD 87, which has been existing and has remained untouched in almost 50 years,” the DOE said in a statement on Tuesday.
“The Department would like to emphasize that [PD] 87 and [Department Circular (DC)] 2007-04-0003 are square pegs in a round hole when applied to a sale of shares of stocks,” it added.
The DC details the guidelines and procedures for the transfer of rights and obligations in petroleum service contracts under PD 87.
Sen. Sherwin Gatchalian, who chairs the Senate Committee on Energy, has criticized the DOE for approving Dennis Uy-led Udenna’s purchase of Chevron’s 45% stake in Malampaya, which he called an “invalid” deal for violating PD 87.
Gatchalian, in another media interview, called the Chevron-Udenna deal as “lutong Macau,” which the DOE in turn touted as “unprecedented,” “misguided,” and “lacking in factual and legal basis” since his committee is still hearing the matter.
The department went on to say that the committee’s hearings on Udenna’s Malampaya purchases “is causing undue delay to the timeline of the consortium corporations, and this may eventually take its toll and put our energy security at risk.”
Should the Shell-Udenna deal be approved, Uy — one of Pres. Rodrigo Duterte’s largest financiers in the 2016 elections — would control Malampaya with 90% ownership.