Udenna stands by legality of Malampaya deal

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Dennis Uy's Udenna Corporation maintained that its decision to buy out a majority stake in the Malampaya gas project was legal. (FILE PHOTO)

Metro Manila (CNN Philippines, November 2) — Dennis Uy's Udenna Corporation maintained that its decision to buy out a majority stake in the Malampaya gas project was legal.

The corporation argued that the transfer of the shares of Shell Exploration BV and Chevron to Udenna was "above board" and underwent "strict bidding processes."

"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," Udenna said in a statement on Tuesday. "Udenna as a key investor in UC Malampaya Philippines Pte Ltd will stand by this legal position."

The group said it released its position due to what it calls "false narratives" flooding social media.

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

Uy - a major contributor in President Rodrigo Duterte's presidential campaign in 2016 - is facing a graft complaint over the 2019 deal.

The acquisition allegedly allowed the government to forfeit ₱138 billion worth of profits - which it could have gained had it acquired the shares - as well as an additional ₱42 billion if it took control for the remaining three years of the Malampaya contract. 

Udenna said these estimates were mere "fabrications" and urged critics to instead focus on the declining gas field.

"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," the corporation said.