Udenna maintains legality of Malampaya deal


Posted at Nov 02 2021 09:32 PM

MANILA - Udenna Corporation on Tuesday insisted on the legality of its acquisition of shares in the Malampaya gas project.

Atty. Raymond Zorilla, spokesperson of billionaire Dennis Uy's Udenna, said in a statement that the transfers of Chevron and Shell shares to Udenna underwent proper bidding.

"Let us be clear that there is no law requiring approval of transfer of shares of companies that have interest in Malampaya. Therefore, no party has the legal ability to rescind the Chevron and Shell transactions," Zorilla said.

"Udenna as a key investor in UC Malampaya Philippines Pte Ltd will stand by this legal position. The transfers of Chevron and Shell shares underwent strict bidding processes and due diligence by both multinational oil & gas players. The share sales were above board and legal and had to pass thorough scrutiny by Philippine regulators, international lenders, and the said private multinationals involved," he added.

Zorilla also said Udenna got the deal because it is "clearly qualified than anyone else to become the shareholder of the prior Chevron company, and in the future, to become the shareholder of the existing operator, via Malampaya Energy XP."

"We were awarded because of the depth of our understanding of the business— how it should be managed and how it can be rejuvenated," he also said.

Addressing reports on how much the government will cede because of the transfer of shares, Zorilla said it is required for the government to pay the international oil companies first.

"On the issue of revenue, 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 PHP50 Billion to purchase offshore companies. Recovery of this government money is high risk given Malampaya is a rapidly declining field with late life engineering and quality challenges," he said.

Zorilla said the issue of the Malampaya deal has become politicized.

"What we aim to focus and work on with the PNOC-EC will be the most pressing issue of rejuvenating Malampaya. Sadly, Malampaya has been made a political battlefield. What the Senate and the other misinformed “concerned” individuals should focus on is the reality that given the decline of the field, and the exit of the foreign players in Malampaya, the asset will only be able to service 6% of Luzon by 2024 unless immediate actions are taken to arrest its quick decline and prevent its eventual end by 2027," he said.

Eduardo Mañalac, former president of the Philippine National Oil Company (PNOC) earlier 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. 

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. 

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.


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