Senate energy committee chairman Sherwin Gatchalian commended PNOC-Exploration Corporation (PNOC-EC) after revealing during last week’s hearing that it will withhold its consent on the sale of Shell Philippine Exploration B.V.’s (SPEX) stake in the Malampaya gas-to-power project to Dennis Uy’s Udenna Corporation.
“This clearly shows that the company put first the interest of the Filipinos and the generations to come. This is an asset of future concern. I laud [PNOC-EC’s] decision and that it will not be put to waste,” Gatchalian said in a statement.
SPEX legal manager Atty. Kiril Caral said during the hearing that Malampaya’s current operator won’t push through with the $460 million transaction for the time being.
PNOC-EC owns ten percent of Malampaya on behalf of the government. SPEX currently owns 45%, while Udenna unit UC Malampaya owns the other 45% after buying it from Chevron in March 2020. Udenna would have 90% ownership should the deal with Shell be finalized.
PNOC-EC President and CEO Rozzano Briguez declined to detail its reasons for blocking the Shell-Udenna deal, as its has yet to fully discuss the matter with other partners and stockholders.
Given this, Gatchalian said he will request an executive session for a comprehensive briefing as to how the state-owned firm arrived at such a decision.
“I would like to give credit where credit is due and that is to [PNOC-EC]. Whatever their reasons in refusing to give their consent to the Udenna Group’s acquisition of Shell’s 45% stake in the Malampaya project, we can now be assured that the chances of having one of the country’s most important national asset being under the control of a seeming unqualified company has dwindled, if not, already nil in possibility,” Gatchalian said.
The senator recalled a committee hearing on July 14, wherein Briguez said that PNOC-EC firm waived its right to match the offer to acquire SPEX’s shares because the government is constrained by many laws to operate such business and that it might affect Malampaya’s operational stability, especially in prompt decision-making that’s required of a very complex offshore exploration company.
Briguez also cited the reason for the availability of funds since government banks are only willing to lend them only up to 50% of the needed amount.
“Because if no government bank will lend to us a specific amount, then that will also compromise the other projects that we have,” Briguez was quoted saying.