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Wednesday, June 19, 2024

‘Filipinos should be vigilant about Malampaya deal’

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Udenna Corp.’s acquisition of 90 percent of the Malampaya gas project is a cause for concern and Filipinos should be vigilant about this development. 

In an interview aired on ANC, Atty. Rico Domingo, president of the Philippine Bar Association, said “the Filipino people should be vigilant about this. It is, as I mentioned, several times this is of national interest. This is for the future generations of Filipinos.”

Domingo also urged the public to “monitor this” as this will eventually have an impact on future generations. 

“And we cannot allow this. We have to stand up and be counted here,” he said during the interview.

Domingo is representing individuals who have filed a complaint before the Ombudsman accusing Department of Energy Secretary Alfonso Cusi and businessman Dennis Uy of graft over the sale of Chevron’s stake in the Malampaya project to Uy’s Udenna Corp.

Domingo said the controversial sale is bigger than the Pharmally case. “We’re talking about P138 billion here,” he said, adding that the government would also lose P42 billion outright, because of the sale.

He said the P138 billion figure, is the total loss that the government will incur “during the entire duration of the project.”

Domingo added that this amount could even be used for other government projects such as COVID-19 alleviation.

Reports said Udenna has acquired a 90 percent stake in the Malampaya project by buying the 45 percent stake of Chevron for $565 million, and another 45 percent stake from Shell for $460 million.

Senator Risa Hontiveros meanwhile said she believes it is “very puzzling and alarming” that a single private entity was allowed to acquire almost all of the Philippines’ strategic fossil energy assets in the West Philippine Sea (WPS). 

Hontiveros said  the company, led by a campaign donor of President Rodrigo Duterte, seemed to have secured a “mind-blowing” number of favorable government deals in recent years.  Dennis Uy, a campaign donor and friend of President Duterte.  

Hontiveros has filed Proposed Senate Resolution No. 950, urging the Senate Blue Ribbon Committee to look into the “propriety” of Udenna’s takeover of the said assets in the WPS, as well as its impact on the nation’s security and economic interests.

“By allowing Udenna to control both the Malampaya Project and its gas pipeline, as well as the fossil energy resources in the Recto Bank, the Department of Energy (DOE) and the Philippine National Oil Company (PNOC) not only deprived the Philippine government of a substantial source of revenue, but also allowed private – and possibly foreign – interests an undue advantage over the nation through the possession of its vital strategic assets,” Hontiveros said.

The DOE also recommended the award to Udenna of two service contracts covering areas in the Recto Bank – an underwater formation said to contain most of the oil and natural gas in the West Philippine Sea.  

The senator pointed out that Udenna paid for the Malampaya shares not with existing assets but with loans from various banks. In return, Udenna is set to earn a projected income of nearly $1.2 billion from its Malampaya shares.

Hontiveros flagged that state-owned PNOC may have allowed Udenna’s “buying spree” by not exercising its right of first refusal  – which gave PNOC the right to have the first opportunity to purchase Malampaya shares owned by Shell and Chevron.  

“If the government had matched Udenna’s offer, it would have been guaranteed a net income of around USD 275 million for around four years, until the existing wells are depleted by 2024. By failing to exercise its right of first refusal, the government was deprived of hundreds of millions of dollars which we could have used to meet the people’s needs,” Hontiveros said. With Macon Ramos-Araneta


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