DOE seeks SC intervention on $4.5-B Malampaya royalty issue

The Department of Energy (DOE) will seek the intervention of the Supreme Court (SC) to finally settle the dispute on who has the jurisdiction over the $4.5-billion Malampaya deep water to gas project.

Energy Secretary Raphael P.M. Lotilla said the National Government will ask the SC to "rule with finality" on who has jurisdiction over the project.

"That is something that we will leave to the SC to rule with finality. They filed a case but that’s at the regional trial court, we will have to bring it to the Supreme Court," Lotilla said.

According to Lotilla, the SC should decide if the province of Palawan is really entitled to the royalties of the project.

"The SC should make a determination on whether or not Palawan even has jurisdiction, (and) whether that jurisdiction over the west Philippine sea where the gas is found," he said.

Lotilla noted that "it can be within the Philippines but does not fall under jurisdiction of any local government unit."

The energy chief cited Philippines’ claim of an extended continental shelf and exclusive economic zones, which extend 200 nautical miles or even beyond.

The Philippines claims an extended continental shelf of 200 nautical miles under the 1982 United Nations Conference on the Law of the Sea (Unclos III) to cover its territorial claim in the Spratly’s Island.

Early this month, the Palawan provincial government through Gov. Joel T. Reyes filed a motion asking the government "to render a full accounting of the actual payments by Shell Philippines Exploration B.V. (SPEX) to the Bureau of Treasury and to freeze and/or place in escrow account the 40 percent share of Palawan."

The motion is anchored on an earlier court decision declaring that Palawan is entitled to a 40 percent share of the national wealth pursuant to the provisions of Section 7 of Article X of the 1987 Constitution and pursuant to the Local Government Code of 1991.

The provincial government has asked the court to freeze and/or put in escrow its 40 percent share in Malampaya.

The Malampaya project is expected to generate $10 billion in royalties for the entire 20-year life of the project.