Philippine business groups flag security risks in energy deals with president’s ally

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MANILA (Businesshala) – Business groups in the Philippines on Wednesday oversaw the sale of a combined 90% stake in the country’s only gas-to-power project to a firm run by an aide of President Rodrigo Duterte, it could warn. Energy security risk.

FILE PHOTO: Philippine President Rodrigo Duterte speaks at Vilamore Air Base in Paise, Metro Manila, Philippines, February 28, 2021. Businesshala / Aloisa Lopez / file photo

The groups, which included major Makati business clubs, urged the Senate and other agencies to continue to “investigate, speak out and act” on the transaction, which, despite the firm having no track record, called Malampaya Natural Gas. Gave control of the property to Udena Corp. in the sector.

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Udenna is run by Dennis Uy, Duterte’s hometown ally and the biggest donor to his 2016 election campaign. His trading empire expanded dramatically during Duterte’s presidency, but Udena insisted that it received no preferential treatment.

It bought Chevron’s 45% stake in Malampaya in late 2019, a deal valued at $565 million and acquired Shell’s 45% stake in the project in May.

The Senate Energy Committee should ask the government why it did not exercise its right of first refusal on shares of Chevron and Shell, the groups said in a joint statement.

The government “may have given up tens of billions of pesos” she said, “and more importantly put the country’s energy and national security at risk.”

He also urged investigators to examine the government’s rationale “to allow the sale of a significant energy asset to a group with no experience or track record in gas exploration or production, at the time of the bid”.

Udena was preparing a statement, spokesman Raymond Zorrilla said on Wednesday. It said last week that the Malampaya transaction involves a strict bidding process and due diligence, and does not require government approval.

Senate Energy Committee Chairman Vin Gachlian had previously concluded that the Energy Department’s approval of the Udena–Chevron deal in particular was “flawed and invalid”, and questioned its validity.

His comments followed a corruption filing last month against DOE officials alleging misconduct and preferential treatment for Udena, which he denies.

The DOE said Chevron and Shell adhered to “rigorous global standards” when they sold their Malampaya stakes.

Reporting by Enrico Della Cruz; Editing by Martin Petty

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