DOE to scrutinize controversial Malampaya deal

State firm PNOC Exploration Corp. (PNOC-EC) is reviewing the transfer of Malampaya shares from global oil giant Shell to the Udenna group led by Davao City-based businessman Dennis Uy amid lingering questions about the validity of the transaction and the rapidly eroding commercial quantity of natural gas output.

Energy Secretary Rapahel Lotilla, who also serves as PNOC-EC chair, said in a briefing on Tuesday that newly installed PNOC-EC president Franz Alvarez was heading a team tasked to evaluate the Shell-Udenna deal.

“They (the team) would have to take this up with the PNOC-EC board soon because there are certain timelines that have to be met,” Lotilla said.

The energy chief said he had also made sure that the PNOC-EC board would have a complement of professional and competent advisers or consultants in the evaluation of the matter.

“I also have great confidence in the career people in PNOC-EC that, together with the consultants to assist the board and president Alvarez in making sure that the necessary due diligence is carried out,” Lotilla said. “From there, it (the matter) would go [be referred] to the DOE (Department of Energy).”

In November 2019, Udenna announced that its wholly owned subsidiary, UC Malampaya Philippines Pte Ltd. had signed with Chevron Philippines Ltd. a sales and purchase agreement for 100 percent shares in Chevron Malampaya LLC, which held a 45-percent, nonoperating stake in the Malampaya gas-to-power project.

In September 2020, Shell announced intention to divest Shell Philippines Exploration BV, which held the 45-percent operator stake in Malampaya. Udenna promptly expressed interest in assuming operator status at Malampaya.

Subsequent Senate hearings revealed that the Udenna-Chevron agreement had been signed about two weeks prior to being made public.

Udenna’s announcement of completion of the transaction on March 11, 2020 was more prompt; it was made just a day after the fact. INQ