Senator Sherwin Gatchalian on Sunday expressed “grave concern” over the country’s power situation after businessman Dennis Uy of Udenna Corporation announced plans to sell the firm’s stake in the Malampaya deep water gas-to-power project.
Gatchalian said the sale of Udenna’s 45 percent interest in Malampaya amid the impending depletion of its reserves has created uncertainty in the country’s power supply.
Udenna confirmed on Friday possible partnerships for its assets, including the Malampaya project amid strong investor interest as the country returns to post-pandemic recovery.
“With the expiration of Malampaya’s service contract in 2024, the depletion of the remaining reserves in the gas field by 2027, and now the possible sale of participating interests of Udenna in the country’s most important energy source, there’s so much uncertainty ahead of us insofar as our energy security is concerned. Are we looking at rotational brownouts again?” Gatchalian said.
But Udenna president Raymundo Martin M. Escalona said the company remains “business as usual” and continues to provide the Philippine government hope for energy security in the medium and long term.
Escalona said Udenna remains committed to the continued growth and development of Malampaya.
“We have a highly qualified team and have expended considerable time, expense, and resources to put ourselves in the position where we can step in to arrest the decline of Malampaya,” he said.
Escalona said Gatchalian has frustrated attempts to develop Malampaya over the past year.
“As a result, today as we speak all development activity on Malampaya is on hold and the field continues to decline impacting energy security of the country. The good reelectionist Senator has single handedly crippled all the planned development of Malampaya and should
be held accountable to the public,” the official said.
“We wish to reiterate however that it is in Udenna’s normal course of business as an investment company to remain open to exploring different opportunities. We have greatly observed the return of investor confidence, and accordingly there has been renewed interest in discussing several partnership and strategic alliance opportunities with the Group the past months,” he said.
Escalona said Udenna will continue to maximize shareholder value through strong partnerships with strategic investors and maintain core assets that provide maximum synergies with the other companies within the Udenna Group.
The senator said he was proven right over the apparent financial incapacity of Udenna’s subsidiaries that acquired the 45% stake of Chevron Philippines, Ltd. and 45% stake of Shell Philippines Exploration B.V. (SPEX).
Gatchalian said he had earlier red-flagged the entry of Udenna in the operations of Malampaya due to reports of debt and cash problems as well as its technical incompetence.
Udenna’s Malampaya buyout hit a snag last December after the PNOC Exploration Corp. (PNOC-EC), which owns 10 percent of Malampaya shares, withheld its consent to the transaction between SPEX and Udenna’s Malampaya Energy XP Pte. Ltd.
A critical energy asset, Malampaya powers more than four and a half million homes and businesses in Mega Manila alone or six out of every 10 customers in Meralco franchise area. It contributes almost 20% of the entire country’s power generation mix.
Malampaya has also provided significant income to the government, totaling P290.76 billion from January 2002 until June 30, 2021.