Chevron – Senator asks Energy dep’t to explain sale of Chevron’s Malampaya stake to Udenna
A SENATOR on Friday asked the Energy department to explain its decision allowing the transfer of the 45% stake of Chevron Philippines, Inc. in the Malampaya gas-to-power project to a unit of Udenna Corp., citing irregularities in the transaction.
Senator Sherwin T. Gatchalian, chair of the Senate Committee on Energy, said UC Malampaya Pte. Ltd.’s acquisition of Chevron’s 45% share in the gas field was completed even if the Dennis A. Uy-led firm failed to submit necessary documents to the Department of Energy (DoE).
The divestment was approved on March 11, 2020 despite the fact that “it was only on Oct. 28 last year that the DoE has been officially provided with the documents on the Malampaya share’s divestment,” Mr. Gatchalian said in a statement.
He noted the joint operating agreement signed by the members of the consortium operating the Malampaya project contains a provision requiring a party to get all prior permits or approvals from the state before sales of shares are finalized.
The senator said the DoE’s legal department, during a Senate panel hearing in November, said these transactions are governed by a circular requiring an “evaluation of the technical, legal and financial capacity of the company.”
The senator also said Presidential Decree (PD) No. 87 requires the approval of the Energy department for the transfer of shares.
The Senate Energy Committee last year told the DoE to help determine “whether there is a need for another issuance to clarify if these kinds of transactions would need executive approval or not, and their recommendations to the legislature on possible amendments on PD 87.”
“It bears stressing the need for an explanation from the DoE’s end on how they could justify their approval of the transaction,” Mr. Gatchalian said.
He said the DoE has the responsibility to explain to consumers the consequences of the divestment because they are “the primordial concern.”
“We want to make sure that the consumers will receive 24/7 electricity at a least cost manner,” he said. “We have laws and regulations that govern all of these transactions, and those laws are meant to create a stable environment in the power sector.” — Kyle Aristophere T. Atienza