Gatchalian Wants DOE Officials Charged Over Malampaya Deal

Officials and employees of the Department of Energy (DOE) behind Udenna Corporation’s questionable buyout of Chevron in Malampaya should be held accountable administratively and criminally, Sen. Sherwin Gatchalian said.

Gatchalian expressed belief that the “facts established during the hearing of the Senate committee on energy will enable us to paint the picture. And once the picture has been painted, we need to hold them into account by filing cases.”

“We are finalizing the details of our investigation and hopefully we will have a look at the report or some form of output in the next few days,” Gatchalian said in an interview during the “Kapihan sa Manila Bay” on Wednesday, Nov. 17.

“The ultimate action is to hold them to account administratively and criminally through our court system, so it means cases should be filed whether in the (Office of the) Ombudsman or in the other court,” he added.

He noted that details about the sale were inquired during the first few hearings on the budget.

“In the next few days, we will have a report, some form of conclusion on how to move forward,” he said.

Earlier, Gatchalian said there’s enough evidence that the decision rendered by the DOE to approve the sale of Chevron’s 45% stake in the Malampaya gas project to the Udenna group of Dennis Uy is defective and invalid.

“My opinion of this is that it is a defective approval, therefore the approval is invalid because clearly there’s a lot of inconsistencies and any major transaction like this should not lead to confusion. Instead of us appreciating it, we got more confused by the DOE’s own admission that there is indeed confusion,” Gatchalian said.

The Senate energy committee chairman made the statement after being told by Energy Secretary Alfonso Cusi that no prior approval by the government was needed in Chevron’s transfer of stakes to Udenna’s UC Malampaya Philippines Pte Ltd. as this was based on an evaluation using the so-called “farm-in process,” which according to Gatchalian made DOE’s explanation all the more confusing.

“Nowhere in the documents that the DOE submitted can you find the argument of using the farm-in (rule). From day one, we were made to understand that this should be approved by the government and the process will follow PD 87 and DC 2007,” Gatchalian pointed out.

Gatchalian was referring to Department Circular No. 2007-04-003 which prescribes the guidelines and procedures for the transfer of rights and obligations in petroleum service contracts under Presidential Decree 87.

Also at the Senate, Sen. Francis Pangilinan wondered why the prized Malampaya natural gas project went to upstart Udenna when the government has the power to exert its stake over the country’s crucial energy asset.

During deliberations of the 2022 budget of the DOE that lasted until near midnight Tuesday, Nov. 16, Pangilinan asked concerned officials to explain the government’s failure to exercise its right of first refusal, which would have given it the option to keep control of the natural gas field that provides 40 percent of Luzon’s energy needs.

“It is very disturbing to listen to the reason given why the Department of Energy did not consider taking or exercising its right of first refusal on the basis of a sweeping, general statement of negative facts and constraints,” Pangilinan said.

“We are given just a broad statement to justify the turnover to a private corporation of a billion-dollar worth of assets. This is incredulous. We deserve a better explanation,” he added.

Amid the controversy, the approval of the DOE budget and its attached agencies was deferred.

Energy officials were to present relevant documents and decisions justifying the sale to Udenna, minutes of the meetings related to the decision and various services of contracts.

Pangilinan pointed out that the DOE cannot wash its hands of the Malampaya sale controversy since its secretary heads the board of directors of the Philippine National Oil Co.-Exploration Corp., which dealt with the matter.