Press Release
September 30, 2021

Gatchalian raises possible 'midnight deal' to extend Malampaya contract amid Udenna-Shell transaction

Senator Win Gatchalian sounded the alarm over the possibility of the government entering into a midnight deal to extend the service contract of the Malampaya project with the gas field operator Shell Philippines Exploration B.V. (SPEX) finalizing the transfer of its participating interest to Udenna Corp.'s subsidiary Malampaya Energy XP Pte Ltd.

Gatchalian noted the speed in the current negotiations when Malampaya Energy entered the picture while Shell was never given assurance by the Department of Energy (DOE) since 2016 if they would be extended or not.

"Hindi talaga maiaalis sa isip na baka magkaroon ng midnight deal dahil 2016 pa lang, gusto na itong i-renew ng Shell. I know that for a fact. I can attest. Ngayong pumasok sa eksena si Udenna, biglang bumilis yung negotiations," Gatchalian said.

From the preliminary negotiations in 2019 for the possible extension of Service Contract (SC) 38 of the Malampaya natural gas field which will expire in 2024, DOE officials told the Senate Energy Committee chaired by Gatchalian that serious negotiations started in the middle of this year along with the creation of a negotiating team.

Gatchalian shares concerns raised by some senators in sealing the sale of SPEX's stake in the gas field project especially with Malampaya Energy already negotiating with the government. One of the conditions being discussed in the negotiations is the possible 70:30 royalty sharing in favor of the government.

"I think it's really quite premature and unethical for Malampaya Energy to negotiate with the government. It's too presumptuous in fact. We already laid down that DC 2007 should be applied to the transfer," Gatchalian said, referring to Department Circular No. 2007-04-003 which sets the guidelines and procedures for the transfer of rights and obligations in petroleum service contracts as underpinned by Presidential Decree No. 87 or the Philippine Oil and Gas Law.

Gatchalian has also questioned the DOE on the "insufficient foundation for legal basis" in the Chevron-Udenna deal in Malampaya.

"What you need to address first is your insufficient foundation for legal basis and I will not tolerate that in the evaluation of Shell. I will take every recourse possible to hold you to account because operations na ang pinag-uusapan dito. Then we look at the Chevron deal. I will likewise hold you to account in this Chevron-Udenna deal," the senator said.

"As Filipinos, we want an operator who is qualified, experienced, and who can assure us of continuous flow of gas to our power plants. Also as a consumer, I want my public servants in the DOE to exercise prudence, diligence and integrity," Gatchalian emphasized.

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Gatchalian nagbabala sa posibleng 'midnight deal' sa pagpapalawig ng Malampaya contract

Nagbabala si Senador Win Gatchalian sa posibilidad na pagpasok ng gobyerno sa isang midnight deal kaugnay ng pagpapalawig sa service contract ng Malampaya project na magtatapos sa 2024.

Ito'y sa gitna ng bentahan ng shares ng Shell Philippines Exploration B.V. (SPEX), ang operator ng Malampaya gas field project, sa Malampaya Energy XP Pte Ltd. Ang Malampaya Energy ay isang kumpanyang nasa ilalim ng Udenna Corp. na pagmamay-ari ng negosyanteng si Dennis Uy.

Ikinabahala ni Gatchalian ang aniya'y napabilis na negosasyon nang pumasok na sa eksena ang Udenna samantalang ni wala raw nakuhang kasiguruhan ang Shell sa DOE mula pa noong 2016 kung palalawigin pa ang Malampaya o hindi na.

"Hindi talaga maiaalis sa isip na baka magkaroon ng midnight deal dahil 2016 pa lang, gusto na itong i-renew ng Shell. Alam ko yan at saksi ako dyan. Ngayong pumasok sa eksena si Udenna, biglang bumilis yung negotiations," ani Gatchalian.

Mula sa preliminary negotiations para sa posibleng extension ng Service Contract (SC) 30 ng Malampaya natural gas field noong 2019, sinabi ng mga opisyal ng DOE na nagsimula na ang mas seryosong negosasyon nito lamang kalagitnaan ng taon at nagbuo kaagad ng isang negotiating team.

Para din kay Gatchalian, Senate Energy Committee Chairperson, nakakaalarma na nakikipagnegosasyon na ang Malampaya Energy sa gobyerno samantalang hindi pa naisasapinal ang pagbili nito sa shares ng SPEX sa Malampaya. Kasama sa mga pinag-uusapan na kundisyon ang 70-30 royalty sharing na pabor sa gobyerno.

"Premature at unethical para sa Malampaya Energy na makipagnegosasyon sa gobyerno," pagdidiin ni Gatchalian.

Kinuwestyon din ni Gatchalian ang DOE sa pag-amin nitong nagkaroon ng "insufficient foundation for legal basis" noong nabili rin ng kumpanya ni Uy ang 45% stake ng Chevron sa Malampaya. Kung tuluyang maaprubahan ang pagbili ng Malampaya Energy sa 45% stake ng SPEX, magiging 90% na ang stake ng Udenna sa Malampaya project.

"Hindi ako papayag na ang sinasabi niyong insufficient foundation for legal basis na nangyari noong nabili ng Udenna ang shares ng Chevron sa Malampaya ay gagawin din ninyo sa Shell. Papanagutin ko kayo lalo na't ang shares ng mismong operator ng Malampaya ang pinag-uusapan dito. Papanagutin ko din kayo sa Udenna-Chevron deal," babala ni Gatchalian sa DOE.

"Bilang mga Pilipino, nais natin ng operator na qualified, may sapat na kakayahan, at makapagbibigay ng kasiguruhan ng tuloy-tuloy na suplay ng gas sa mga planta. Bilang isang konsyumer, hinihiling ko sa DOE na manaig sa kanila ang integridad at due diligence upang hindi makompromiso ang suplay at presyo ng enerhiya sa bansa," pagtatapos ni Gatchalian.

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