MANILA, Philippines -- The much contested sale of the government's 10 percent stake in the Malampaya gas-to-power project has been put on hold and will be subjected to further study, according to the newly appointed energy chief.

At the sidelines of the turnover ceremonies on Monday, Energy Secretary Jose Rene D. Almendras said he recommended to the state-owned Philippine National Oil Co. (PNOC) to resolve first, the board issues hounding its subsidiary PNOC-Exploration Corp. prior to making a decision whether the stake should be sold or not.

?The reason why it is on hold is because the board was not able to make the appropriate decisions, so the guidance from me is to resolve board issues and then we'll have to study how the Malampaya approach is going to be, or even ask the question: do we really want to sell Malampaya if it's generating revenues for the government today,? Almendras explained.

PNOC-EC owns a 10-percent stake in the Malampaya project, which powers the country's three natural gas power plants. The remaining 90 percent stake is held by Shell Philippines Exploration B.V and Chevron Texaco.

Since 2008, the government has been trying to dispose its 60-percent shareholdings in PNOC-EC. In 2009, however, the Department of Finance changed its tack and had decided to auction off instead, the assets of PNOC-EC, particularly the Malampaya stake.

The planned sale, which was expected to generate some P16 billion for the government, was however met with strong opposition from the former members of PNOC-EC's board of directors, who claimed that rushing the sale of the stake would only lead to a fire sale.

Almendras said he and Finance Secretary Cesar Purisima both agreed that ?the most important thing we want to do is to slow down. Let's understand what it is, what is involved... we will pursue the decision as soon as we can... but without sacrificing interests.?

?I'm not saying we won't (sell the stake). The finance side of me says I've no problem selling it if you're going to pay me a premium over the net present value or the future cash flows it can bring to the government,? he added.

Meanwhile, Almendras said that the Department of Energy would study pending contracts, not because they wanted to know how these contracts have been processed but rather to ?reach a level of comfort (and be able to implement) the mandate that the president gave me (which was to) even the level playing field?that's critical to encouraging more investments in energy.?

?We will review in the interest of knowing how it should be done, what's the right way of doing it,? he added.

Almendras said the deal on the $1.2-billion Batangas-Manila (BatMan 1) pipeline, that was supposed to be undertaken by PNOC and private sector joint venture partner, would be reviewed.

Local firm Abacus Consolidated formed a consortium with Sultan International Holdings, based in Abu Dhabi and with Saipem ENI of Italy to design, finance, construct, operate and maintain the BatMan 1. The group already submitted an unsolicited proposal last December 2009 to enter into a joint venture with PNOC.

PNOC has already accepted Abacus? proposal for purposes of negotiating the term of reference of the joint venture agreement in accordance with the guidelines provided by law, and which will be subjected to a Swiss challenge.