MANILA - The government missed out on earning tens of billions of pesos from the Malampaya gas field, according to a former head of the government-owned company that has a stake in the natural gas producer.
Eduardo Mañalac, former president of the Philippine National Oil Company (PNOC) said the government should have bid for the stakes of Chevron and Shell in Malampaya, instead of letting Davao-based billionaire Dennis Uy gain control of the gas field.
"Malaking malaking sayang because, ito ang mga hinihintay ng mga national oil companies,” Mañalac said.
(It’s a big, big loss because this is the kind of opportunity national oil companies wait for.)
“You compare this to Petronas, CNOOC of China, national companies of Myanmar, those little poor countries like them but with oil, this is what they are looking for, this opportunity,“ he added.
Mañalac said he doesn’t understand why the government allowed Udenna to buy out Chevron and Shell, even though the PNOC had the right to match the offer and assume control.
He estimates that in a typical year, Malampaya earns roughly P45.5 billion. He based this on PNOC’s 10 percent revenues from the venture from 2018 to 2020 which averaged around P4.55 billion yearly.
Since PNOC’s main source of revenue is Malampaya, the P4.55 billion represents its 10 percent share in the gas field consortium, he said.
Uy’s Udenna purchased Chevron’s 45 percent share for $565 million, and Shell’s 45 percent stake for $460 million, for a total of $1.025 billion. At an exchange rate of P51.77 to a dollar, this is roughly P51.77 billion pesos.
It would only take Udenna about a year and a quarter to earn this back based on Mañalac’s estimate. And Malampaya’s viability could go well beyond the 2024 expiration of its current service contract, Mañalac noted.
Meanwhile Udenna said “the numbers quoted in various statements and reports regarding what the government will be ceding are mere fabrications.”
“Any government agency purchasing the Shell and Chevron shares has to first pay these international oil majors P50 billion to purchase offshore companies,” said Udenna spokesperson Raymond Zorrilla.
He also said there was a “high risk” about the government recovering this money as “Malampaya is a rapidly declining field with late life engineering and quality challenges.”
This was in contrast to Mañalac’s assertion that there were still a lot of gas to be produced from the field, from proven reserves as well as those that have yet to be drilled.
"The DOE themselves said not only that they are seeing potential additional new reserves from new prospects that have yet to be drilled,” Mañalac said.
Uy and Energy Secretary Alfonso Cusi are facing a graft complaint over the Malampaya deal.
The people who filed the complaint before the Ombudsman alleged that anomalies in the Malampaya deal caused “a minimum of over P21 to 42 billion in total losses to the government.”
One of the complainant criticized Udenna’s takeover of Malampaya as “most incredible crony agreement in the entire history.”
A senator investigating Udenna’s purchase of Chevron’s stake also described the deal as "Lutong macau" meaning it was rigged.
Cusi meanwhile described the graft complaint as "harassment" and insisted that the Udenna deals are above board.
Zorilla also insisted that the sale of Chevron and Shell stakes underwent strict bidding processes and due diligence by both multinational oil and gas players.
“The share sales were above board and legal and had to pass through scrutiny by Philippine regulators, international lenders, and the said private multinationals involved,” the Udenna official said.
Zorilla also said “no party has the legal ability to rescind the Chevron and Shell transactions.”