Sen. Sherwin Gatchalian is asking the Department of Energy (DOE) to justify its decision to approve the sale of Chevron’s 45% in the Malampaya gas-to-power project to Udenna Corporation of Davao-based businessman Dennis Uy.
“No less than the DOE’s legal department, in a Senate hearing last November 10, 2020, told the [Senate] Committee on Energy that such transaction is governed by a DOE circular requiring an evaluation of the technical, legal and financial capacity of the company,” said Gatchalian, who chairs the committee.
The senator also said that Presidential Decree (PD) 87 also requires the approval of the DOE on such transfer of shares in upstream petroleum ventures.
“Also, in the joint operating agreement signed by the members of the consortium operating Malampaya (Shell, Chevron and PNOC-EC), there exists a provision that for the sale of shares to be finalized, the party or the transferer has to ensure that they get all prior permits or approvals from the government,” he pointed out.
Gatchalian also emphasized that though the Chevron-Udenna transaction was completed in March 2020, it was only later October that the DOE was officially furnished with documents regarding the sale.
Prior to the DOE’s approval of the sale, the committee “sought the department’s submission of its legal basis in reviewing the transaction, whether there is a need for another issuance to clarify if these kinds of transactions would need executive approval or not, and their recommendations to the legislature on possible amendments on PD 87.”
Gatchalian once again questioned Udenna’s technical capability to handle Malampaya.
“It bears stressing the need for an explanation from the DOE’s end on how they could justify their approval of the transaction. This involves not just an ordinary asset. It demands a lot of experience, technology, and global connections. The oil and gas industry is a global business. The technical know-how is also required and this is because we’re looking at the larger picture which is the energy security of the country,” he emphasized.
Udenna said has absorbed Chevron’s personnel for its Malampaya operations.
Uy looks to control Malampaya, as Udenna is also after Shell Philippines Exploration’s 45% stake, along with fellow tycoon Manny V. Pangilinan.