Shell row referred to Duterte

The Energy Department is elevating to Malacañan the latest arbitration case filed by Shell Philippines Exploration B.V. against the government. 

Spex lodged an new arbitration case against the government at the International Center for Settlement of Investment Disputes regarding a tax dispute over the Malampaya gas project in northwest Palawan.

Spex, operator of the Malampaya gas project registered the case on July 20, 2016 under the subject dispute heading of “hydrocarbon concession, taxation.”

“The DoE will exhaust all possibilities and avenues to study options and bring before the President recommendations that will have one objective: to protect and serve the best interests of our country and the Filipino people,” Energy Secretary Alfonso Cusi said in a statement.

Spex filed the case against the Philippine government to challenge the interpretation of the Commission on Audit in the computation of the 60-40 sharing of the proceeds from the Malampaya gas project.

The Supreme Court in a separate case ruled that all service contracts were void unless personally signed by the President.

The ruling signifies that all service contracts signed only by the Secretary of the Department of Energy with foreign-owned companies involving technical or financial assistance for large–scale exploration, development and utilization of petroleum are void for being unconstitutional.

“We welcome this [arbitration] as an opportunity for the national government to effect real change and to come up with definitive and clear-cut policies in dealing with our partners,” Cusi said.

State-owned PNOC Exploration Corp., owns a 10 percent interest in Service Contract 38 consortium, with Spex and Chevron Malampaya LLC holding 45 percent each.

“This issue is not the concern of the Department of Energy nor of the Executive branch alone. The Supreme Court, the Commission on Audit and even Congress have a stake here too.” Cusi said.

“In the end, a nationalistic approach is necessary to make a unified stand. This is in line with the Duterte administration’s vision of unity in our country,” he said.

Cusi said the department would recommend to the President the necessity of aligning government institutions to work together and act consistently.

“The Philippine government must have a unified stand in all its decisions and actions just as we have shown in the West Philippine Sea issue,” he said.

“Ultimately, whatever mandate each branch or agency has, our bottom line is one and the same: to serve the best interests of the Filipino people,” Cusi said.

The Office of the Solicitor General was named respondent in the arbitration case.

“We can confirm that Spex has filed a request for arbitration with the International Center for the Settlement of Investment Dispute. The case has been filed pursuant to the bilateral investment treaty between the Philippines and the Netherlands,” Spex said in an earlier statement.

Spex has a pending separate arbitration case against the government lodged with the arbitration tribunal in Singapore.

Topics: Energy Department , arbitration case , Shell Philippines Exploration B.V. , Spex , International Center for Settlement of Investment Disputes , Malampaya gas project
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