Malampaya shares’ sale to Udenna hit

Read the front page for more details of the bargain sale of Malampaya shares to Udenna Corp. and the graft charges filed against Energy Secretary Alfonso Cusi, Udenna chair Dennis Uy and 24 others over the transaction where the government reportedly lost at least P138 billion.

The breaking CNN Philippines story on it yesterday had people muttering there must be a way to block the sale of valuable assets such as the Malampaya gas-to-power project by an administration on its way out, especially when the buyer is reputed to be a presidential crony.

Geologist Balgamel Domingo filed the complaint Monday with the Office of the Ombudsman in Iloilo City. Other complainants were lawyer Rodel Rodis and businesswoman Loida Nicolas Lewis, both based in the United States.

The CNN story written by Melissa Luz Lopez quoted Eduardo Mañalac, former president of state-run Philippine National Oil Co., as saying the government effectively forfeited billions in profits when it allowed Udenna to buy a 45-percent stake in the project from oil giant Chevron in 2019.

The government has tapped since 2001 private service contractors to explore waters off Palawan for gas deposits. The natural gas extracted supplies over 20 percent of the country’s power needs. The government earned 60 percent and its private partners 40 percent of revenues.

Shell Exploration BV and Chevron each owned a 45-percent stake in the project, with the remaining 10 percent maintained by the state through PNOC-Exploration Corp. In the past two years, however, Chevron and Shell sold their shares to Uy’s UC Malampaya, giving it 90-percent control.

Mañalac said: “If the government acquired the shares, it could have taken up to P138 billion. Because neither government nor PNOC took the shares, we lost that amount.”

He added that without Uy’s buyout, the government could have received an additional P42 billion if it took control for the remaining three years of the Malampaya contract – and even more given the recent surge in global oil prices.

The complaint said that the Department of Energy was remiss in its duties in reviewing Udenna’s financial capacity, and in the process gave the company “unwarranted benefits” and caused “undue injury” to the government.

It said further: “Despite knowledge of its right to match UC Malampaya’s offer and the anticipated good returns of the investment in Chevron’s share, PNOC-EC failed to exert any effort to purchase Chevron’s participating shares.” It said that the DOE under Cusi, who is also PNOC chair, did not perform due diligence before clearing the deal.

It added: “ Sec. Cusi still proceeded to belatedly approve the questioned sale despite Udenna and UC Malampaya’s failure to meet the technical and financial qualifications of a Service Contractor.” The newly-formed company did not have enough capital and was counting on loans to support the deal, it added.

Retired Supreme Court senior associate justice Antonio Carpio said the government should have stepped in, especially as the Malampaya facility’s contract is expected to end in 2024 or when gas supply is expected to run out.

He said: “We have people who can run that – Filipinos. Dennis Uy will only take advantage of that… This is the biggest presidential gift to a crony.”

Based in Davao, Uy owns Phoenix Petroleum and was one of the biggest campaign donors of President Duterte in 2016.

Cusi, who is vice chair of the ruling PDP-Laban party, described the graft charges as political “harassment” with the 2022 elections heating up. In 2017, he popped up on the list of billionaires in the Duterte Cabinet with a net worth of P1.355 billion.

COVID-19 hit before he got a booster

Former secretary of state Colin Powell was all set for his third (booster) COVID-19 shot when he suddenly fell ill last week, giving the virus an opening to claim the four-star general Monday while in the hospital. What went wrong?

Reports said Powell, 84, received his second Pfizer shot in February but was immunocompromised as a result of his treatment for his blood cancer (multiple myeloma) which severely impairs the immune system and lowers the effectiveness of vaccines.

That information was given to the press by his longtime assistant, Peggy Cifrino. We’re awaiting medical bulletins from the Walter Reed National Military Medical Center in Bethesda, Maryland where the former chair of the Joint Chiefs of Staff had been treated.

In its report on the death of Powell, who served under three Republican presidents, the Washington Post said “coronavirus vaccines may not work in some people… it’s because of their underlying conditions.”

WaPo said: “As a blood cancer patient, even one successfully treated, Powell would have become eligible for another dose of mRNA vaccine under an August recommendation from federal regulators that covered people who are immunocompromised and may not have mounted a normal immune response from the initial shots. Officials have said the extra shots should be seen as a way for these patients to complete the initial immunization.

“Citing the waning of antibodies over time, federal officials have also authorized a third shot six months after the initial course of a Pfizer vaccine for people over 65 or at higher risk of complications because of underlying health conditions or occupational exposure.

“A Food and Drug Administration advisory panel has recommended the same for recipients of the Moderna vaccine, though the agency must authorize the extra shot. The panel also recommended a second shot for all recipients of the single-shot Johnson & Johnson vaccine, which the agency must also authorize.

“At 84, Powell was at an age already at high risk of severe outcomes from COVID-19. People in that age cohort are also at higher risk of a severe outcome if they have a post-vaccination breakthrough infection.

“The evidence is overwhelming that vaccines are effective at lowering the risk of hospitalization and death from COVID-19. They do not, however, create an impermeable barrier to infection.”

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NB: All Postscripts are also archived at ManilaMail.com. Author is on Twitter as @FDPascual. Email: [email protected]