The Senate Committee on Energy will conduct an inquiry into the status of the sale of Shell Philippines Exploration B.V.’s (SPEX) 45% stake in the Malampaya gas-to-power project, its chairman Sen. Sherwin Gatchalian said in a statement on Friday.
Gatchalian’s statement follows the Udenna Group’s purchase of SPEX on Thursday night, resulting in its 90% ownership of Service Contract (SC) 38.
“Given the significant role that the Malampaya project plays in the Philippines’ energy security, it is imperative that the DOE apprise the Filipino public on Malampaya’s operations — the remaining natural gas reserves and the government’s plans for continuous energy supply, likewise on the pending request for the extension of SC38,” Gatchalian said in Senate Resolution 724, which he filed days before the transaction’s announcement on Tuesday.
Gatchalian wants to know during the inquiry the Department of Energy’s (DOE) plan for Malampaya if it indeed approves the sale. Energy Asec. Leonido Pulido III said that the DOE can rescind the $460 million deal if it proves that Malampaya Energy XP Pte. Ltd. — the Udenna unit that bought SPEX — is technically and financially incapable to run the project.
The senator also wants to find out the DOE’s direction amid the impending expiration of SC38 in 2024. He also pointed out on Tuesday that Malampaya’s reserves would be completely depleted by the first quarter of 2027.
“It is critical for the DOE to ensure that whoever gets hold of Shell’s interest should have, not just similar experience or capacity, but more so the technical, financial and legal capability to operate the Malampaya project or to be a service contractor,” Gatchalian emphasized.
He added that the DOE should ensure that the transfer of interests of the members of the consortium should go through a comprehensive review and evaluation in compliance with the requirements of Presidential Decree 87.