DOE on Dennis Uy's Malampaya takeover: Buying share in gas project risky for gov’t

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Metro Manila (CNN Philippines, October 21)— Energy Secretary Alfonso Cusi on Thursday denied being remiss in exercising the government’s right to match the offer of Davao businessman Dennis Uy’s Udenna Corporation in buying out a majority stake in the Malampaya gas project.

At a Senate hearing on the proposed 2022 budget of the Department of Energy, Cusi said state-run Philippine National Oil Company Exploration Corporation studied the implications of buying Chevron’s 45% share, but decided against it.

"When you buy there is a risk... This is a case of damned if we do, damned if we don’t. Bilhin mo, tatanungin bakit binili (If you buy, you will be asked why),” Cusi said, taking note of Malampaya’s depleting reserves.

Kung hindi mo binili, ito naman ang assumption: pinabayaan namin. What I can assure you, hindi po ito pinabayaan ng PNOC-EC. The board deliberated on that,” added Cusi, who sits as chairman of the PNOC-EC board.

[Translation: And if you don’t buy it, the assumption is neglect of duty. What I can assure you, the PNOC-EC did not neglect it. The board deliberated on that.]

Cusi, Uy, and 24 others are now facing graft complaints for the 2019 buyout. Former PNOC president Eduardo Mañalac said the government effectively forfeited up to ₱138 billion in profits from Malampaya.

Uy was one of President Rodrigo Duterte's campaign contributors in the 2016 presidential race.

Shell Exploration BV and Chevron each owned a 45% stake in the project, with the remaining 10% maintained by the state through PNOC-EC. In the past two years, however, Chevron and Shell both sold their shares in the project to Uy's UC Malampaya, giving it a 90% controlling stake.

"Why did Chevron sell and why is Shell selling? That is another issue. Are they getting away from the Philippines? These are questions [that also need] to be discussed," Cusi said.

He reiterated that the DOE scrutinized the Chevron-Udenna deal to ensure that the country's energy security is not compromised.

CNN Philippines’ Eimor Santos and Melissa Lopez contributed to this report.