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Friday, March 29, 2024

Geologists ask gov’t to take over Malampaya natural gas project

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The Association of Filipinos for the Advancement of Geosciences, a professional organization of geologists, warned that the country will be deprived of P42 billion in profits if it fails to take over Service Contract 38, or the Malampaya gas project in northwest Palawan.

AFAG, in a position paper, opposed the transfer of Chevron Malampaya LLC’s stake in SC 38 to UC Malampaya controlled by businessman Dennis Uy.

AFAG urged government to rescind the Chevron transaction and also prevent the sale of the 45-percent stake of Shell Philippines Exploration B.V. to the Udenna Group.

“We ask that, instead, the Philippine government take full control and management of SC 38,” the group said.

AFAG said it was opposing the transfer to UC Malampaya because the transaction “lacks transparency and is grossly disadvantageous to the Filipino nation.”

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“If government does not take full control and management of SC 38, the Filipino people is deprived of about P42-billion net profits from Malampaya. Further, full government control will greatly enhance the country’s energy security,” AFAG said.

AFAG said to fully receive the benefits of the remaining Malampaya gas reserves, the government should exercise its rights and power to take full control and management of SC 38 through PNOC Exploration Corp. which has the rights to purchase the interests of the selling partners Chevron and Spex.

“The government through PNOC EC can take advantage of the profitability of the Malampaya gas reserves to arrange the necessary financing and technical expertise, both local and international, to take over and safely and efficiently operate the Malampaya facilities,” it said.

AFAG is a professional organization formed in 1959 with over 200 members of practicing and retired geologists in various fields.

Senator Sherwin Gatchalian questioned the technical, financial and legal capability of the Udenna Group for the acquisition of Chevron’s 45-percent stake in the Malampaya gas project but Energy Secretary Alfonso Cusi said the sale and its approval of the deal is above board.

Meanwhile, PNOC wanted to monetize and deliver the Malampaya banked gas to its new buyers this year.

“PNOC is in negotiation with other interested buyers of the remaining banked gas. We are hopeful that delivery of banked gas to the new buyers will resume before this year ends,” PNOC officer-in-charge Graciela Barleta said during the 46th ASCOPE Council Meeting last week.

PNOC previously generated additional revenues from the sale of 1.181 petajoules of banked gas to Pilipinas Shell Petroleum Corp. and was trying to monetize the remaining volume of gas.

It signed a memorandum of understanding in June with Power Sector Assets and Liabilities Management Corp. for the latter’s planned acquisition of the Malampaya banked gas.

PNOC was also in talks with other potential buyers of the banked gas, the accumulated unused gas of the Ilijan natural gas power plant as a result of the underutilization of the plant’s take or pay quantity from 2002 to 2007.

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