Gatchalian calls DOE approval of Udenna-Chevron Malampaya deal “lutong makaw”

Senator Sherwin Gatchalian on Monday called the Department of Energy’s (DOE) approval of Udenna-Chevron deal on the sale of Malampaya Consortium shares “lutong makaw.”

“After conducting three hearings and going through all the documents which all came from DOE, ang sabi ko lang lutong makaw itong transaction and lutong makaw ‘yung approval (all I can say is the transaction and the approval were lutong makaw),” said Gatchalian, chairperson of the Senate energy committee.

“Lutong makaw” is a Filipino idiom which means a decision has been rigged or pre-arranged.

Gatchalian said the DOE had violated Presidential Decree 87, the law which provides the rules for the discovery and production of indigenous petroleum, as well as its Department Circular 2007.

“It customized its approval to make it appear that Udenna is qualified and this came out in all the hearings, it came out in all the documents. In fact, the documents, we do not have a star witness or a star document, everything came from them and we just made sense of these documents,” the senator said.

Citing their analysis of the DOE documents, Gatchalian said the Energy officials have approved the technical and legal evaluation for UC Malampaya, a subsidiary of Udenna. However, the DOE has approved UC38 LLC for the financial capacity evaluation.

“We saw in their own evaluation that UC Malampaya has unqualified, has negative working capital. So you don’t customize an evaluation because [in] one of the criteria, they will fall short. They have to be consistent. So in other words, the problem here is they didn’t follow the law and they didn’t follow their own circular,” he explained.

“It should be very clear for us, consumers, that the evaluation was executed in a transparent and a prudent manner,” he emphasized.

Gatchalian noted that the criminal complaint filed against Energy Secretary Alfonso Cusi and other individuals involved in the Chevron-Udenna deal "has a basis” as the documents cited there were all from DOE.

“Those things that they alleged in that case which I read, all came from the documents and the hearing that we conducted so in other words the approval is invalid. The process is defective. Therefore, what they approved is invalid and this is where the problem comes in, energy security now is at risk,” he said.

Following Cusi’s approval of the Chevron-Udenna deal, Gatchalian said he will study the next legal remedies for this transaction to make sure that “accountability is exerted” on the side of the government.

He pointed this out as he warned that DOE approval of the Chevron-Udenna deal could also be used with the Udenna-Shell Malampaya transaction.

“Definitely, we will not allow DOE to use the defective process. We will not allow the DOE to evaluate the Shell-Udenna deal using the process that they used in the past because that is clearly defective,” he said.

“Unfortunately, we are now in a very risky position because what they approved is a transaction where the entities did not comply with the law…but now we are in a situation where the risk is high because the proponent is not qualified,” he said.

GMA News Online has sought Cusi’s comment on Gatchalian’s remarks, but he has yet to respond as of posting time.

To recall, Uy’s Malampaya Philippines Pte. Ltd. last year completed the buyout of the 45% Chevron Philippines stake in the offshore gas field in Palawan. It has since been renamed UC MPPL.

Aside from Dennis Uy’s group, the Malampaya Consortium is 45% owned by Shell Philippines Exploration B.V. (SPEX), and 10% by state-owned Philippine National Oil Co. (PNOC).

In a previous interview, Cusi has maintained that the deal was not a “midnight deal” and it is beyond DOE’s purview.—AOL, GMA News