Senator Sherwin Gatchalian challenged Udenna Corp. over the weekend to show its technical capability to operate the $4.5-billion Malampaya gas-to-power project in northwest Palawan.
Gatchalian expressed concern Udenna Corp. would resort to having a Chinese partner to take a majority control in the Malampaya project.
“Notwithstanding the nature of transaction which is private, Malampaya is not an ordinary asset, you need tech and global connections,” Gatchalian told reporters in a virtual briefing over the weekend.
Gatchalian, chairman of the Senate committee on energy, said the sale of Chevron Malampaya LLC’s 45-percent stake to Udenna was a business transaction because the latter was a “passive investor.”
He said, however, the sale of the 45-percent stake of Shell Philippines Exploration B.V. would be different as Spex is the operator of Malampaya.
“If you take over Shell which is the operator, the dynamics will change. Under PD [Presidential Decree] 87, technical know-how is required to become operator of Malampaya,” he said.
“Whoever takes over that portion of Shell should have a tech capability or at least demonstrate…They should demonstrate they can operate it competently,” Gatchalian said, adding that the new Malampaya operator should also demonstrate they can explore and develop Service Contract 38 or the Malampaya gas field.
Gatchalian said taking over the remaining portion of Malampaya would trigger the issue of energy security. “We deserve to understand whether the new owners can operate that properly,” he said.
He said Udenna has no technical capability to take full control of the Malampaya gas project.
“We have to admit Udenna itself has no capability but it has to demonstrate. They need to demonstrate they will develop or acquire capability,” he said.
He said that if Udenna would take a Chinese partner, there might be “national security concerns.”
“That’s another dimension. We have issues with China in WPS [West Philippine Sea] and that angle will come in play and might open up other issues specifically on national security,” he said.
Gatchalian said no Philippine company has the capability of running a gas and oil rig.
“I am not saying they cannot acquire or develop capability,” he said.
Gatchalian said the government may not be able to acquire additional Malampaya shares because of its fiscal position amid the coronavirus pandemic.
PNOC Exploration Corp. owns a 10-percent stake in the Malampaya gas project.