Public Interest in Malampaya: Everyone’s a stakeholder

CHEERS TO TV5’s Frontline Tonight for its segment which helped the public understand the importance of the Malampaya gas project which was the first to develop the power of natural gas in the country. 

Impressive visualization enhanced the Ed Lingao explainer of the scope of the project which started in 2001. The report brought the audience right on the scene in  the South China Sea where a geo-technical structure of two platforms had made it possible for Shell Philippines to extract gas from a deep-water reservoir, process and transport it through a pipeline of 500 meters to an onshore power plant in Batangas, and from there to four others plants to distribute it through power grids around the country. 

It took no more than three minutes but it succeeded in reviewing the project history, and its impact on the country’s power supply by providing  some 22 per cent of national needs. Noting that after 20 years, the gas supply in Malampaya may be nearing depletion. Lingao warned how this would surely mean more dependence on imported fuel and higher power costs  in the future. 

The relevance of Malampaya to the power supply is a subject relevant to people’s lives. But the business prospects of Malampaya have also become of greater current interest. 

Lingao capped the report with an update on the new owners of Malampaya.  He asked, what is the interest of Udenna Corporation, owned by Dennis Uy, in the gas field at this point? Lingao speculated that Yu may be taking the chance of finding other sources of power in the location and his purchase includes all the massive infrastructure with which he and his partners can explore the fields of the South China Sea. Media should look into his partners more closely. 

The sale of  Malampaya Natural Gas project shares to Dennis Uy’s Udenna Corporation first made the news last November 2019, when Chevron Philippines Ltd. sold its 45 percent stake in it. In May 2021, Shell Philippines Exploration B.V. sold all its shares as well to Udenna, raising the latter’s control of the Malampaya project’s service contracts to 90 percent. Government ownership through the Philippine National Oil Company is now limited to the remaining 10 percent  that the government owns through the Philippine National Oil Company.

Victor Andres C. Manhit in his column in Business World on November 2 recalled that cases were filed with the Ombudsman against Energy Secretary Alfonso Cusi for the lack of due diligence in approving the sale to Udenna because it did not show any track record in power exploration and development, having just been registered in 2019.

The legality of the sale to Udenna is now being examined by the Senate, with a focus on Udenna’s financial integrity and its capacity to operate Malampaya. Uy is a known Duterte ally and a major contributor to his 2016 presidential campaign. 

Manhit stressed that both the sale of Malampaya and the awarding of billions worth of contracts to Pharmally reflected the prevailing cronyism of the administration. 

This $4.5-billion deep water gas project has more to reveal than what’s  on the surface.