IBON: Spratly deal a repeat of disastrous Malampaya sale
IBON research head Sonny Africa said the Spratly deal violates the Constitution and threatens to have the Philippines on the economic losing end.
"This is the experience with the Malampaya natural gas project where foreigners disproportionately benefit from the country's natural gas resources," Africa said.
Africa said the $4.5-billion Malampaya Deepwater Gas-to-Power Project exploits some 3.7 trillion cubic feet of natural gas reserves, or 95% of the country's proven such reserves.
But the project is 45% owned by Shell Philippines Exploration, 45% by Chevron-Texaco and only 10 percent by Philippine National Oil Company (PNOC).
Shell and Chevron-Texaco thus control virtually all of the country's natural gas and corner the largest share of benefits from its exploitation, he said.
"For their investment SPEX and Chevron-Texaco expect to get $14 billion back over 20 years, or P574 billion at current exchange rates.
As it is, Shell Philippines Exploration BV declared net income of P3.5 billion and Chevron Malampaya LLC of P7.5 billion in 2006, or a total of over P11 billion. The Department of Energy, in turn, declared Malampaya gas sales revenues of just P5.4 billion in 2006," Africa noted.
He said Shell and Chevron benefited from significant incentives under PD 87 of 1972 and Service Contract No. 38.
Both are allowed to deduct all operating and capital expense (not exceeding 70%) from gross income and are exempted from income tax, entitled to duty free importation and unrestricted entry of foreign personnel.
On the other hand, the government failed to negotiate any kind of meaningful technology transfer, meaning a perpetual reliance on foreign firms for exploitation of our energy resources.
"Such government neglect is to blame for the never-ending argument that foreign investment is needed for the expertise they bring. Foreign firms will always disproportionately benefit from the country's natural resources as long as they have this technological leverage," he said.
Africa noted the Malampaya project was officially inaugurated in October 2001, and remains the country's single largest foreign investment project in the country's history.
It was immediately criticized for violating the Constitutional limit on foreigners of 40% on exploration, development and utilization of natural resources. - GMANews.TV