Senator Win Gatchalian sounded the alarm over the possibility of the government entering into a midnight deal to extend the service contract of the Malampaya project with the gas field operator Shell Philippines Exploration B.V. (SPEX) finalizing the transfer of its participating interest to Udenna Corp.’s subsidiary Malampaya Energy XP Pte Ltd.

• From the preliminary negotiations in 2019 for the possible extension of Service Contract (SC) 38 of the Malampaya natural gas field which will expire in 2024, DOE officials told the Senate Energy Committee chaired by Gatchalian that serious negotiations started in the middle of this year along with the creation of a negotiating team;
• Gatchalian shares concerns raised by some senators in sealing the sale of SPEX’s stake in the gas field project especially with Malampaya Energy already negotiating with the government;
• Gatchalian also questioned the DOE on the “insufficient foundation for legal basis” in the Chevron-Udenna deal in Malampaya.

Gatchalian noted the speed in the current negotiations when Malampaya Energy entered the picture while Shell was never given assurance by the Department of Energy (DOE) since 2016 if they would be extended or not.

“Hindi talaga maiaalis sa isip na baka magkaroon ng midnight deal dahil 2016 pa lang, gusto na itong i-renew ng Shell. I know that for a fact. I can attest. Ngayong pumasok sa eksena si Udenna, biglang bumilis yung negotiations,” Gatchalian said.

From the preliminary negotiations in 2019 for the possible extension of Service Contract (SC) 38 of the Malampaya natural gas field which will expire in 2024, DOE officials told the Senate Energy Committee chaired by Gatchalian that serious negotiations started in the middle of this year along with the creation of a negotiating team.

Gatchalian shares concerns raised by some senators in sealing the sale of SPEX’s stake in the gas field project especially with Malampaya Energy already negotiating with the government. One of the conditions being discussed in the negotiations is the possible 70:30 royalty sharing in favor of the government.

“I think it’s really quite premature and unethical for Malampaya Energy to negotiate with the government. It’s too presumptuous in fact. We already laid down that DC 2007 should be applied to the transfer,” Gatchalian said, referring to Department Circular No. 2007-04-003 which sets the guidelines and procedures for the transfer of rights and obligations in petroleum service contracts as underpinned by Presidential Decree No. 87 or the Philippine Oil and Gas Law.

Gatchalian has also questioned the DOE on the “insufficient foundation for legal basis” in the Chevron-Udenna deal in Malampaya.

“What you need to address first is your insufficient foundation for legal basis and I will not tolerate that in the evaluation of Shell. I will take every recourse possible to hold you to account because operations na ang pinag-uusapan dito. Then we look at the Chevron deal. I will likewise hold you to account in this Chevron-Udenna deal,” the senator said.

“As Filipinos, we want an operator who is qualified, experienced, and who can assure us of continuous flow of gas to our power plants. Also as a consumer, I want my public servants in the DOE to exercise prudence, diligence and integrity,” Gatchalian emphasized.