IBP calls for cancellation of Udenna’s Malampaya acquisition

udenna malampaya

The Integrated Bar of the Philippines (IBP) called for the cancellation of a 45% stake in the Malampaya project to Udenna Energy Corp. and delay the final approval of another 45% this year by the Department of Energy (DOE).

“While the Senate investigation is ongoing, (we) call on the DOE to rescind its approval of (Chevron Malampaya LLC’s) transfer of its 45% interest in Malampaya to Udenna subsidiary UC Malampaya (Pte Ltd.), and to hold in abeyance its approval of Shell Philippines Exploration BV’s (SPEx) transfer of its 45% to another Udenna subsidiary, Malampaya Energy XP,” the IBP said in a statement.

Citing the possibility of a buyer with limited technical expertise and financial capability inviting foreign parties with interests that are hostile to the country, the IBP said“ … a buyer who is not technically and financially capable of operating Malampaya may tap companies from foreign countries having adverse interests in the West Philippine Sea dispute,” and added that such a move will threaten the Philippines’ strategic energy resources.

As the Senate Committee on Energy reviews Udenna’s Malampaya deals, the DOE has expressed that such investigations are delaying the timelines of consortiums participating in developing the country’s energy resources.

Last October, a criminal complaint was filed before the Ombudsman against officials of the DOE, Udenna, Chevron Malampaya LLC, Shell Philippines Exploration (SPEX), and PNOC-Exploration Corporation (PNOC-EC) by concerned citizens, saying that Udenna subsidiaries are financially and technically unqualified to operate Malampaya.

The DOE and PNOC-EC were also accused of neglecting the option to match the Udenna offer in the buyout of the Chevron Malampaya stake.

Sen. Risa Hontiveros filed a resolution Friday urging the Senate Blue Ribbon Committee to investigate the acquisition of the stakes in Service Contract 38, the resource block that includes the Malampaya gas field.

The DOE calls Hontiveros’ resolution “speculative”.

In March 2020, Udenna, through its subsidiary UC Malampaya, acquired Chevron Malampaya LLC’s share in the project for $565 million. The DOE approved the deal in April.

In May, another Udenna unit, Malampaya Energy XP, bought out SPEX, which had held a 45% operating interest in Malampaya, for $460 million.