Uy’s P42-B Malampaya profits can feed 10.5-M starving families

GOTCHA - Jarius Bondoc - The Philippine Star

Malampaya is the biggest presidential gift to a crony, retired justice Antonio Carpio laments.

The state gas field was given to Dennis Uy without open bidding. The Davao City tycoon rakes in P115 million a day from the country’s principal petroleum asset. Had energy officials been dutiful, government should be earning that daily P115 million.

That cash – P42 billion a year – can fund:

• P4,000 emergency “ayuda” to 10.5 million hungry families. Malacañang keeps saying “there’s no more money for ayuda;”

• The unpaid P13-billion meal/transportation/accommodation allowance for one year of 200,000 doctors, nurses, orderlies, lab technicians, hospital janitors and security guards on pandemic duty. As well, their P5,000 a month each special risk allowance totalling P12 billion for 2021;

• P25,000 aid and P7,200 fuel subsidy to 150,000 distressed jeepney drivers totalling P4.8 billion;

• Aid to hog raisers hit by African swine fever, and poultry and vegetable growers dislocated by unabated smuggling;

• Aid to 350,000 small fishing families dispossessed by Chinese aggression in the West Philippine Sea;

• Aid to hundreds of thousands of overseas workers displaced by the global economic crunch.

Instead it will all go to Uy, President Rodrigo Duterte’s biggest 2016 campaign contributor.

Uy took over the 90 percent shares of global giants Shell and Chevron through two newborn, inexperienced shops. One of them had only $100 (P5,000) capital.

It gobbled up Shell for $460 million and Chevron for $565 million. “Lutong makaw!” Senator Sherwin Gatchalian remarked in an inquiry. Malampaya supplies up to 30 percent of Luzon’s electricity. Control by a technically and financially unqualified firm can lead to blackouts.

Uy, his shell companies, Energy Sec. Alfonso Cusi and state firm Philippine National Oil Co.-Exploration Corp. have been charged with graft at the Ombudsman. Complainants are geologist Balgamel Domingo and Filipino-American lawyers Loida Nicolas Lewis and Rodel Rodis.

Shell and Chevron used to make P21 billion each a year from Malampaya. They lost interest when the Dept. of Energy refused to extend their operation contract beyond 2024. They were impleaded in the graft rap for failure to seek prior government approval of their sellout to Uy.

PNOC-EC was accused of negligence in not matching Uy’s offers to Shell and Chevron. It shares ten percent of Malampaya operations, but owns the rig, platform and 500-kilometer pipeline worth $4.5 billion. Cusi is chairman.

Now that Uy has taken over, the DOE reportedly is contemplating a 15-year extension. Gatchalian has warned Cusi against such “midnight deal.”

Uy’s Udenna Corp. and Cusi deny any wrongdoing. Udenna claims that the Shell/Chevron buyouts were private transactions. Cusi says the strict legal requirements and the pandemic constrained his agency from holding a public selection of new operators.

Uy’s takeover has stirred up fears of Chinese entry into Malampaya and nearby Recto Bank. Since Uy needs an experienced partner, reports are that China National Overseas Oil Corp. will come in. CNOOC already has a partnership with Uy in a liquified natural gas terminal in Batangas.

Recto holds thrice more oil and gas than Malampaya. China illegally has been barring Filipino surveyors from the area, falsely claiming ownership of the resource within the Philippines’ 200-mile exclusive economic zone.

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The two largest lawyers’ organizations oppose the Malampaya takeover.

The Philippine Bar Association says: “Shorn of all the smoke and mirrors, the irrefutable fact stands: what the DOE calls the backbone of the country’s power generation mix, is now in the hands of an untested and unknown entity.

“The defense that transactions between private parties are ‘not subject to review’ is unsatisfactory. What is concerned is not a car, a building or any ordinary asset. It is a facility... that sits in an area that has grave national security implications.

“We call on the DOE to put national interest first... That Malampaya ended up in the hands of an entity that is not technically or financially sound is beyond negligent; it is criminal.

“We call on the Senate to continue its probe. We ask the Ombudsman to exercise its powers before everything is too late. We join the rest of the citizenry in demanding answers.”

The Integrated Bar of the Philippines “calls on the DOE to rescind its approval of Chevron’s transfer of interest to Udenna subsidiary UC Malampaya, and Shell’s transfer to another subsidiary, Malampaya Energy XP.

“IBP also calls on DOE to thoroughly review, study and consider the extension... of the original Malampaya consortium – Shell, Chevron, PNOC-EC. This way, the consortium will be able to conduct further exploration in light of the forthcoming depletion of Malampaya field. Extension will incentivize [them] to continue operating with their proven technical and financial track record in petroleum exploration and development, in contrast to a buyer with no proven experience in operating a highly technical and capital intensive operation.”

Twelve business groups have also questioned Uy’s takeover.

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