Udenna Corporation of Davao-based tycoon Dennis Uy has broken its silence defend its acquisitions of Chevron’s and Shell Philippines Exploration B.V.’s (SPEX) combined 90% stake in the Malampaya gas project.
Based on an ABS-CBN News report, Udenna spokesman Atty. Raymond Zorrilla stressed that UC Malampaya, which purchased Chevron’s 45% in March 2020, and Malampaya Energy XP (MEXP), which bought SPEX last May, are qualified to be awarded the Malampaya shares.
“We were awarded because of the depth of our understanding of the business — how it should be managed and how it can be rejuvenated,” he said in a statement.
The Department of Energy approved the Chevron-Udenna deal last April, while it aims to finish reviewing the Shell-Udenna transaction this November. Nonetheless, both deals have been heavily criticized, with senators questioning UC Malampaya’s financial capability after finding out that it had negative working capital.
Udenna also contested former Philippine National Oil Company (PNOC) President Eduardo Mañalac’s earlier claim that the share sales did not make sense since the government would earn billions from Malampaya once its Service Contract (SC) 38 expires in 2024.
“Any government agency purchasing the Shell and Chevron shares has to first pay these international majors Php50 billion to purchase offshore companies. Recovery of this government money is [high-risk] given Malampaya is a rapidly declining field with late life engineering and quality challenges,” Zorrilla said.
Mañalac added in the ABS-CBN report that the government wasted a huge opportunity when it opted not to increase its ownership in Malampaya.
PNOC — through PNOC-Exploration Corporation — owns ten percent of Malampaya on behalf of the government, which supposedly takes full control of an exploration project when an SC’s term is finished.
Udenna also slammed those who filed the graft case against Uy, Energy Sec. Alfonso Cusi, and several others.
“What the Senate and the other misinformed ‘concerned’ individuals should focus on is the reality that given the decline of the field, and the exit of foreign players in Malampaya, the asset would only be able to service [six percent] of Luzon by 2024 unless actions are taken now to arrest this decline and prevent the eventual end of Malampaya by 2027,” Zorrilla said.
Other than the Chevron-Udenna deal, Senate energy committee chairman Sherwin Gatchalian raised a “red flag” on Udenna’s financial capability to purchase SPEX given that its casino project in Clark, Pampanga was suspended reportedly due to financial woes.
Uy was one of Duterte’s major financiers in the 2016 elections.