SEVERAL business groups urged the Senate and concerned agencies to continue looking into the sale transaction of Malampaya stake.
In a statement on Wednesday, these groups said the government should “fully explore why the government did not exercise its right of first refusal over Chevron’s and Shell’s shares in Malampaya” gas field project.
“By failing to do so, the government may have given up tens of billions of pesos at a time when the government needs money more than ever and more importantly has put the country’s energy and national security at risk,” the statement read.
Shell Philippines Exploration B.V. sold its 45-percent stake in Malampaya to Malampaya Energy XP Pte Ltd., a subsidiary of Dennis Uy-led Udenna Corp. It is yet to be approved by the Department of Energy.
The signatories said they understand if the government has concerns over buying the ownership Chevron and Shell despite the future revenues offsetting the cost given the current situation.
As such, they asked the “Senate and concerned agencies and groups to fully explore if the government could easily get financing for such a purchase, as was done by the private purchaser, given Malampaya’s stable and highly guaranteed revenue stream.”
The Senate and concerned agencies also need to look into why the government failed to award a license, whether by extension or to a new consortium, in 2019, they said.
“From an energy security standpoint, the delay may be a breach of fiduciary duty given that the existing wells are expected to be depleted by 2025, and the estimated 5 years needed to explore and develop additional wells,” the groups noted.
It is also important for the legislators to see the logic behind the sale of a critical energy asset to an entity that has “no experience or track record in gas exploration or production” during the bidding process.
“Given the acquirer’s lack of expertise and heavily financed nature of the proposed purchases, it is highly likely that they will take on partners,” they added.
The parties told the government to assess the buyer’s financial and technical capabilities and interests.
In addition, the government needs to “reserve, enforce and exercise its right to block and invalidate transfers of shares and control that may be disadvantageous to the Filipino,” they said.
The signatories are the Energy Lawyers Association of the Philippines, Financial Executives Institute of the Philippines, Filipina CEO Circle, Integrity Initiative Inc., Investment Houses Association of the Philippines, Makati Business Club, Philippine Women’s Economic Network and Women’s Business Council Philippines.