MANILA, Philippines — The country’s power situation faces uncertainty with the plan of businessman Dennis Uy of Udenna Corp. to sell his controlling stake in the Malampaya deep water gas-to-power project, Sen. Sherwin Gatchalian warned yesterday.
Gatchalian, who chairs the Senate committee on energy, said he was deeply worried over the reported plan as it was not clear who may choose to buy the stake of Uy, whose Udenna was found to be incapable of running the project.
“With the expiration of Malampaya’s service contract in 2024, the depletion of the remaining reserves in the gas field by 2027, and now the possible sale of participating interests of Udenna in the country’s most important energy source – there’s so much uncertainty ahead of us insofar as our energy security is concerned. Are we looking at rotational brownouts again?” Gatchalian said.
“I have proven myself right after all, over the apparent financial incapacity of Udenna’s subsidiaries that acquired the 45 percent stake of Chevron Philippines Ltd. and 45 percent stake of Shell Philippines Exploration B.V. (SPEX),” he said.
The senator said he had red-flagged the entry of Udenna Corp. in the operations of Malampaya due to reports of debt and cash problems as well as its technical incompetence.
Udenna’s Malampaya buyout hit a snag last December after the Philippine National Oil Co.-Exploration Corp., which owns 10 percent of Malampaya shares, withheld its consent to the transaction between SPEX and Udenna’s Malampaya Energy XP Pte. Ltd.
A critical energy asset, Malampaya powers more than four and a half million homes and businesses in Mega Manila alone or six out of every 10 customers in the Meralco franchise area. It contributes almost 20 percent of the entire country’s power generation mix.
Malampaya has also provided significant income to the government, totaling P290.76 billion from January 2002 until June 30, 2021.
“This development is alarming. Malampaya is our only source of natural gas in the country and the Senate investigation show that the owner of Udenna is buried in debt and has no technical expertise in this kind of business,” Gatchalian said in Filipino.
He said he has been warning for a long time that if Malampaya will be controlled by an entity without solid credentials, the country will suffer.