Senator Sherwin Gatchalian on Friday asked the Department of Energy to justify its decision approving the transfer of Chevron Philippines’ ownership in Chevron Malampaya LCC to UC Malampaya Philippines controlled by Udenna Corp. of businessman Dennis Uy.
“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,” Gatchalian, chairman of the Senate committee on energy, said in a statement.
Gatchalian said the DOE’s legal department, in a Senate hearing on Nov. 10, 2020, told the committee that such transaction was governed by an agency circular requiring an evaluation of the technical, legal and financial capacity of the company.
Presidential Decree 87 also requires the approval of the DOE on such transfer of shares in upstream petroleum ventures, he said.
“The consumers are the primordial concern. We want to make sure that the consumers will receive 24/7 electricity at a least cost manner. We have laws and regulations that govern all of these transactions, and those laws are meant to create a stable environment in the power sector,” the senator said.
Gatchalian also cited a provision in the joint operating agreement signed by the members of the consortium operating Malampaya including Shell Philippines Exploration BV, Chevron Malampaya LLC and PNOC-Exploration Corp. that for the sale of shares to be finalized, the party or the transferer should ensure that they get all prior permits or approvals from the government.
UC Malampaya Philippines, owned by Udenna Corp., completed on March 11, 2020 its acquisition of Chevron Malampaya LLC, the holder of a 45-percent interest in Malampaya gas field project. The DOE was provided with the documents on the Malampaya share’s divestment in October last year.
“Prior to the DOE announcement on their approval of the sale, it is worthy to note that the Senate energy committee has 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 said.