Review of Malampaya deal ‘on track’ – DOE

MANILA, Philippines — The Department of Energy (DOE) has tapped a pool of industry experts to assist the agency in reviewing the proposed sale of Shell’s interest as operator of Service Contract 38, saying that PNOC Exploration Corp. (PNOC-EC) is on track in its review of Prime Infrastructure’s Malampaya acquisition.

“Just to assure you that the review by the PNOC-EC on Prime Infra’s acquisition is on track and the notification to the DOE, having been received, is also moving in parallel,” Energy Secretary Raphael Lotilla said in a virtual briefing yesterday.

Lotilla said the early resolution of the Malampaya stake sale is vital to the country’s energy security.

“Definitely, since we know that the present Malampaya-Camago field is a finite one, the resolution of the sale, the resolution of the legal, technical, and financial issues regarding the sale of SPEX (Shell Philippines Exploration B.V.) interest is important to the energy security of the country,” he said.

Lotilla earlier assured the public that a decision on the Malampaya stake sale would be made within the year, saying that state-run PNOC-EC is considering giving its consent to the sale of SPEX’s stake in Malampaya to MEXP Pte Ltd.

MEXP Pte Ltd., previously owned by Udenna Corp. of Davao businessman Dennis Uy, was sold to Enrique Razon’s Prime Infrastructure.

With its 10 percent stake in the Malampaya project, the state-run PNOC-EC will have to give its consent on the deal first.

The DOE has announced the designation of special technical and financial review committees and consultants who will assist the agency on its review of the Malampaya deal.

“This pool of advisers is expected to assist the DOE in ensuring that its decisions on matters relating to the Malampaya service contract consider all the relevant factors and are founded on sound technical analyses,” Lotilla said.

The technical review committee will be chaired by former PNOC-EC president and CEO Rufino Bomasang, and will be joined by former DOE undersecretary Francisco Delfin Jr. and former Napocor president Froilan Tampinco as members.

Serving as a consultant to the committee is Edgar Benedict Cutiongco, who is the current president of the Philippine Petroleum Association of the upstream industry and a senior lecturer at the University of the Philippines National Institute of Geological Sciences.

The financial review committee, meanwhile, will be chaired by founding and former chairman and CEO of KPMG R.G. Manabat & Co. Roberto Manabat, with members that include former SGV & Co. chairman and managing partner J. Carlitos Cruz and former Department of Finance (DOF) undersecretary Gabriel Singson.

Ephyro Luis Amatong, former commissioner of the Securities and Exchange Commission and DOF assistant secretary, will serve as a consultant for the financial review committee.

For the legal aspect, the DOE has selected as consultant Luis Ma. Uranza, a former director of PNOC-EC.

“In availing of the expertise of these individuals, we want to assure the public that the DOE will exercise the utmost care and diligence, in carrying out its mandate involving the country’s upstream oil and gas sector in general, including the country’s biggest gas-to-power initiative to date—the Malampaya-Camago project,” Lotilla said.