Senator rejects DoE claim of hearings hindering Malampaya development

by
SHELL GLOBAL

SENATOR Sherwin T. Gatchalian, who chairs the chamber’s energy committee, rejected the Energy department’s claim that legislative hearings are delaying work on the Malampaya gas field amid an investigation into the project’s change in ownership.

“It is the responsibility of the consortium to fulfill their commitment and if there’s any ongoing delay in fulfilling their work program, it’s the DoE’s responsibility to hold the consortium accountable,” Mr. Gatchalian said in a statement Wednesday.

“We at the Senate are exercising our oversight functions as part of the check and balance mechanism in the government given the significant role that the Malampaya gas field plays in our country’s energy security,” he added.

The Department of Energy (DoE) has said Malampaya consortium members are seeing their timelines for doing work on the field delayed after a series of public hearings into their transactions.

“It is unfair to accuse the Senate of delaying any timeline or work program of the consortium,” Mr. Gatchalian said.

In March 2020, Udenna group unit UC Malampaya Philippines Pte. Ltd. acquired Chevron Malampaya’s 45% stake in the gas-to-power project, which was approved by the DoE.

Earlier this year, Shell Petroleum N.V. reached a deal with another Udenna subsidiary, Malampaya Energy XP Pte Ltd., to acquire the 45% stake held by the project’s operator Shell Philippines Exploration B.V.

The DoE is currently reviewing the technical, financial, and legal aspects of the Shell-Udenna deal.

In a statement earlier this week, Udenna Spokesperson Allan Raymond T. Zorilla said the Chevron and Shell deals were compliant with government bidding rules.

“The share sales were above board and legal and had to pass thorough scrutiny by Philippine regulators, international lenders, and the private multinationals involved,” he said.

According to Mr. Zorilla, both UC Malampaya and Malampaya Energy XP are qualified to hold stakes in the project.

“We were awarded because of the depth of our understanding of the business — how it should be managed and how it can be rejuvenated.”

The DoE has said that Udenna’s deals with Chevron Philippines, which owned Chevron Malampaya; and Shell Petroleum N.V., were in line with “rigorous” global standards.

In a statement on Oct. 26, the department said no law which compels it to review the sale of shares between private companies, but it decided to review the Shell-Udenna deal anyway since the gas field accounts for a significant portion of the power mix.

The remaining 10% of the Malampaya project is held by the Philippine National Oil Co.-Exploration Corp.

Located off northwest Palawan, the Malampaya field fuels five power plants on Luzon with a combined capacity of 3,200 megawatts.

The Energy department has said that the gas field’s reserves are expected to be commercially depleted by 2027. — Angelica Y. Yang

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