THE camp of businessman Dennis Uy, majority owner of Udenna Corporation- Malampaya (UC-Malampaya), which, in turn, is now the majority owner of the Malampaya Gas Field off Palawan, maintained they have not violated any law when they purchased the stocks of Shell Philippines and Chevron (Caltex), contrary to the allegation of Sen. Sherwin Gatchalian, chair of the Senate Committee on Energy.
“We are well aware of the allegations and false narratives flooding the media and private groups on social media.
“Let us be clear that there is no law requiring approval of transfer of shares of companies that have interest in Malampaya. Therefore, no party has the legal ability to rescind the Chevron and Shell transactions,” said Atty. Raymond Zorrilla, spokesman of Udenna, in a statement emailed to Pinoy Exposé last November 2, 2021.
Prior to this, Pinoy Exposé reported Gatchalian’s statements last October 4, 2021, on the result of committee’s last hearing on September 28, 2021, where the solon castigated the Department of Energy (DOE) for approving the sale of Chevron’s 45 percent stake at Malampaya in March 2020, despite “insufficient foundation” of legal basis.
On the other hand, UC-Malampaya also acquired the 45 percent stake of Shell Petroleum last May 20, 2021, according to the official press statement of the transaction.
With both deals concluded, UC-Malampaya now controls 90 percent ownership of the natural gas field while the remaining 10 percent remains with the state-owned, Philippine National Oil Company – Exploration Corporation (PNOC-EC).
Despite Gatchalian’s protests, Zorrilla said that Udenna, as “a key investor” in UC Malampaya Philippines Pte Ltd., “will stand by this legal position.”
The transfers of Chevron and Shell shares underwent strict bidding processes and due diligence by both multinational oil and (natural) gas players.
“The share sales were above board and legal and had to pass thorough scrutiny by Philippine regulators, international lenders, and the said private multinationals involved,” Zorrilla explained further.
“The company that has the working interest must remain the same, which was the case in both the Chevron and Shell transactions,” he added.
Zorrilla also expressed confidence that they have the skills and knowledge to operate the gas field, which, according to Gatchalian, continues to supply “3.7 million households and powers 27 percent” of the energy requirements in Luzon.
“We, in Udenna believe that UC Malampaya Philippines Pte Ltd, is clearly qualified than anyone else to become the shareholder of the prior Chevron company, and in the future, to become the shareholder of the existing operator, via Malampaya Energy XP.
“We were awarded because of the depth of our understanding of the business— how it should be managed and how it can be rejuvenated.
“Furthermore, the very same experts who dedicated their knowledge and expertise and have been with Chevron and Shell for more than 20 years are the same experts in the current management and operations of Malampaya.
“On the issue of revenue, the numbers quoted in various statements and reports regarding what the government will be ceding are mere fabrications.
Any government agency purchasing the Shell and Chevron shares has to first pay these international oil majors P50 Billion to purchase offshore companies.
“Recovery of this government money is high risk given Malampaya is a rapidly declining field with late life engineering and quality challenges,” Zorrilla explained further.
The lawyer also averred their acquisition of Malampaya has been turned into “a political battlefield.”
“What the Senate and the other misinformed ‘concerned’ individuals should focus on is the reality that given the decline of the field, and the exit of the foreign players in Malampaya, the asset will only be able to service 6 percent of Luzon by 2024 unless immediate actions are taken to arrest its quick decline and prevent its eventual end by 2027,” Zorrilla added.