House Assistant Majority Leader and Cebu Rep. Eduardo Gullas criticized the Makati Business Club (MBC) for calling on the government to take control of the operations of the offshore Malampaya gas field.
In a statement, Gullas expressed that the majority of the country’s representative chambers of commerce and industry “want the government to stay out of any business and avoid competing with private enterprises.”
The congressman even took a swipe at the MBC, saying it is possible that business groups in the provincial cities like Cebu and Davao tend to perceive the MBC as an “elitist club from ‘imperial’ Manila.”
Last month, MBC and several other business groups expressed support for the Senate’s continuing probe on Udenna Corporation’s Malampaya acquisitions, particularly to fully explore why the government did not exercise its right of first refusal over Chevron’s and Shell Philippines Exploration B.V.’s (SPEX) shares in Malampaya.
Chevron and SPEX had a combined 90% stake in Malampaya prior to Udenna’s purchases. The Department of Energy is still reviewing the Shell-Udenna deal, which took place in May. Before that, the agency approved the Chevron-Udenna deal in April.
Former Philippine National Oil Company (PNOC) President Eduardo Manalac had said the share sales did not make sense since the government would earn billions from Malampaya once its Service Contract (SC) 38 expires in 2024.
Gullas pointed out that the whole point of the government’s petroleum service contracting is to let private firms assume risking capital to develop indigenous oil and gas resources. He particularly noted that Manny V. Pangilinan-led PXP Energy and Ayala-led ACE Enexor have existing service contracts in the West Philippine Sea.
He likewise recalled that in 2007, the government sold its 60% stake in what was then PNOC Energy Development Corporation (PNOC-EDC) for Php58.5 billion amid pressure to bridge the budget deficit. No one, according to Gullas, protested in favor of the government keeping ownership since the firm was the country’s largest and the world’s second-largest geothermal power producer.
PNOC-EDC, now Energy Development Corporation, serves as the renewable energy arm of Lopez-led First Gen Corporation.
Gullas also stressed that the government is a “debt-ridden lumbering giant that cannot compete with highly capable private entities” that can operate and grow energy assets.