The Integrated Bar of the Philippines (IBP) has intervened in the controversy involving over the transfer of the Malampaya project shares from Chevron Malampaya LLC (Chevron) and Shell Philippines Exploration (SPEX) to a subsidiary of Dennis Uy’s Udenna Corp.

In a statement signed by its national president Burt Estrada and board of governors, the lawyers’ group urged for transparency over the issue as it expressed “deep apprehension and concern” surrounding the ongoing divestment being done by Chevron and Shell considering the numerous allegations against the move.

“In light of the strategic importance of the Malampaya energy resources to national security and economic interest, the Integrated Bar of the Philippines supports the ongoing Senate Committee on Energy’s investigation in aid of legislation on the interest divestments to the Udenna subsidiaries,” the IBP said.

It said that such an inquiry will determine if the DOE was transparent in determining the financial and technical qualifications of the Udenna companies to acquire a total of 90 percent interest in the Malampaya deepwater gas-to-power project under Petroleum Service Contract No.38.

SC No.38 fuels three gas-fired power plants and provides 30 percent of Luzon’s power generation requirements.

Pending the result of the Senate’s investigation, the IBP is urged the Department of Energy (DOE) to rescind its approval of Chevron’s transfer of its 45-percent interest in Malampaya to Udenna subsidiary, UC Malampaya and hold in abeyance its approval of SPEX’s transfer of 45 percent to another Udenna subsidiary, Malampaya Energy XP.

The IBP noted the assignment of Chevron’s 45 percent interest to UC Malampaya and the ongoing divestment of SPEX’s 45 percent in favor of Malampaya Energy XP is allegedly detrimental to national security and interest.

The remaining 10-percent interest is maintained by the state through the Philippine National Oil Company-Exploration Corp.

A criminal complaint has already been filed with the Office of the Ombudsman last month against officials of the DOE led by its chief, Alfonso Cusi, Udenna officials led by Uy, Chevron, SPEX, PNOC and its subsidiary PNOC-Exploration Corp. alleging among others that Udenna’s subsidiary is “financially and technically” unqualified to be the assignee of the interest, that the DOE and PNOC grossly neglected government’s right to match Udenna’s offer to buy out Chevron’s 45 percent interest, and that DOE and PNOC officials conspired to give unwarranted benefits to Udenna and its subsidiary.

“The IBP also calls on the DOE to thoroughly review, study, and consider the extension of SC 38 in favor of the original Malampaya consortium—SPEX, Chevron and PNOC-EC,” the IBP said.

“In this way, the original consortium will be able to conduct further exploration on SC 38 in light of the forthcoming depletion of the Malampaya natural gas field.”

The DOE earlier said that given the present production level and continuous decrease in reservoir pressure, the drop in supply of SC 38 is expected by 2022.

SC 38, according to the DOE, will expire in 2024 with no certainty of an extension and that only through further exploration will the extent of Malampaya’s life be determined.

The IBP said in the event that Chevron and SPEX proceed with their divestment plans, the PNOC should exercise its right to match any offer laid before the latter.

“The IBP believes that PNOC being a state-owned petroleum company has the mandate and wherewithal to raise funds for acquiring and controlling interests in Malampaya. A PNOC takeover will be financially advantageous to the Philippine government since Malampaya is a producing field with an existing infrastructure for other petroleum discoveries,” the IBP said.

It also said that with PNOC in control of Malampaya operations, the country can be assured that its energy resources will be protected from any possible foreign interference inimical to national security and interests.

“To fund further exploration and development, a buyer who is not technically and financially capable of operating Malampaya may tap companies from foreign countries having adverse interests in the West Philippine Sea dispute. This will place our strategic energy resources and infrastructure in the hands of hostile foreign interest,” the group said.

The IBP has also called on Ombudsman Samuel Martirez to immediately resolve the complaints filed against officials of the DOE, Udenna, Chevron, SPEX and PNOC in connection with the deal.





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