Surigao Del Sur Rep. Johnny Pimentel slammed the proposal of several groups urging the government to buy the 45% operating stake of Shell Philippines Exploration B.V. (SPEX) in the Malampaya gas field, calling it “a foolish idea that would easily force taxpayers to suffer another $1 billion (Php50 billion) in public debt obligations.”
According to Pimentel, the money to be used to pay for the stake would only contribute to the country’s already swollen foreign debts.
In a statement, the solon explained that the takeover would cost $1 billion “because on top of paying $460 million to Shell, the government would have to borrow and spend another $500 million to $600 million to explore and develop additional production wells.”
The government reported an unprecedented Php1.37 trillion budget deficit in 2020, due to its aggressive spending in stimulating the economy whilst fighting the COVID-19 pandemic, “and the government simply cannot afford to incur additional debt obligations now, considering its worsening budget deficit,” Pimentel said.
Udenna Corporation of Davao-based businessman Dennis Uy, through subsidiary Malampaya Energy XP, bought SPEX last May. Uy, a major campaign contributor of Pres. Rodrigo Duterte, is expected to have 90% control of Malampaya should the Department of Energy approve the Shell-Udenna deal.