Waste of resources

More than a year ago, this column joined other media colleagues in a crusade of sorts to get government to act decisively on the issue of whether or not to tap the deposit of crude oil sitting beneath the natural gas layer in our very own Malampaya field off Palawan.

Soft-spoken Energy Secretary Raphael Lotilla rose to the occasion, we recall, and pushed the Philippine National Oil Company (PNOC) to heed that call. Despite grumblings from some quarters, the Lotilla initiative gained headway and PNOC got the go-signal to go ahead and get a joint venture partner to tap and develop that precious oil deposit.

The call to extract that oil deposit was rather urgent. Reason: If that deposit of precious oil is not extracted soon enough, the country can lose it forever.

Allow this column to recall some of the items we mentioned on this issue more than a year ago.

We pointed out earlier that Malampaya is not just natural gas as we may have believed for a long time. Below the 600-meter thick natural gas layer is a 56 meter-thick oil zone which data from a Norwegian exploration said could contain as much as 40 million barrels. PNOC president Eduardo Mañalac, the world-class Filipino geologist who discovered China’s biggest oil field, was more conservative. He placed the estimate at 25 million to 30 million barrels.

When we were discussing this issue last year, the estimated possible government share from this resource was pegged at $600 million to $1.2 billion.

Here’s the sad news. At this point in time, the deposit may no longer fetch that much. Reason: For every day that the extraction of that deposit is delayed, the volume of what could be extracted diminishes correspondingly. The reason is there is a continuing decrease in the level of pressure that could push that deposit up. Fact is, there will come a time when there would be no more sufficient pressure to push that deposit up. Once that happens, extracting that precious oil deposit would no longer be economically wise.

In the process, the country also loses $600 million to $1.2 billion in potential revenues and foreign exchange savings.

In fairness to Mañalac and Lotilla, they did what they could to push that project. No, they did not sleep on the job. They did try to get a competent and capable outfit to help extract that precious oil deposit. Unfortunately, the effort appears to have been recently stuck up in a quagmire, thanks to a well-funded demolition effort aimed at crippling the PNOC.

We are puzzled by the viciousness of the smear campaign against PNOC and Mañalac. But we do know this is part of the territory. What is unfortunate, however, is the fact that the Malampaya crude oil project may have become collateral damage, a victim of the determined campaign to oust Mañalac from the PNOC.

The smear campaign, however, may have brought about some unexpected blessings. For one, it has triggered the establishment of stricter rules and procedures regarding the selection of entities who want to enter the upstream petroleum industry.

Last we heard, the low-key Lotilla is already putting together a team that will draft the more stringent rules. The move has earned the support of leaders of the business sector and is expected to protect our precious energy resources, including the oil of Malampaya, from unqualified entities.

But it has also elicited more brickbats. We were surprised to learn that some quarters, instead of applauding the move to have stricter qualifying and selection rules, opted to step up the smear drive against PNOC and its head. No, we are not defending Manalac. This column believes Manalac’s reputation can withstand the well-funded black propaganda. What saddens us is the thought that with an intensified smear drive played out in media, the bid to have that precious Malampaya oil extracted could face further delay.

That delay costs P33 million a day in lost potential royalties and foreign exchange savings. That is also how much the smear campaign is costing our country in terms of opportunity losses.

The current coffee shop talk is that the parties behind the smear drive are now knocking loudly at the doors of the Palace to ask for Ed Manalac‚s head. The PNOC chief, they say, has caused enough trouble for them. The stricter rules now being drafted could write "finis" to their lucrative "rent" business.

Well, let these parties do what they have to. But please, just make sure the demolition job on Ed Manalac does not stand in the way of the Malampaya oil extraction project. Perhaps these parties don’t care that PNOC could lose one good man.

But they should care that this country could lose 25 million barrels of black gold. That would be something difficult to forget. Or forgive.

Forces at play

Malacanang‚s top brass is reportedly closely watching developments unfolding at the Court of Appeals involving a case filed by a certain Blue Ridge Minerals Corp. questioning the award of mining rights to a company owned by a very influential businessman.

Why Malacanang’s interest in this case? Well, it suspects that Blue Ridge has very close connections with The Firm, the same group which Malacanang believes was responsible for the charter change ruling.

So what ties Blue Ridge to The Firm? One of the stockholders/directors of the company involved in the Comelec counting machine controversy is also the owner of Blue Ridge. Some of the partners in The Firm are also connected with Blue Ridge. One of the big shots of The Firm used to be the chairman of this mining company. One of the appellate court justices is said to be very close to another big shot of The Firm. Coincidental? Maybe. Maybe there‚s nothing to worry about and the case will be decided impartially. But Malacanang believes something is going on.

Because of the strained relationship between Malacanang and The Firm, a lot of corporate licenses have become in danger. As mentioned by one writer, "the post cha-cha tremors will ripple across the local corporate world like never before, that is, if relationships are indeed strained." The Firm has of course denied allegations that it was behind the court decision against Cha-cha. One of its founding partners voted against Cha-cha.

While the Comelec counting machine firm Mega Pacific has already been dissolved, Comelec is now being criticized for awarding a P78 million contract to Multi-Forms Corp. to print registration forms and ID cards. Multi-Forms and Mega-Pacific have interlocking directors. Senator Aquilino Pimentel says it is improper for the Comelec to award a big contract to an entity which has affiliations with a corporation which still owes the government P800 million. Pimentel has also claimed that the owner of Multi Forms and a son of Comelec chairman Ben Abalos are incorporators of Mega Pacific.

Many times, to understand how the business world works, you have to know the various forces at play. Influence is power and whoever has the influence has the power to decide how the forces should work. Is Malacanang getting back at The Firm and its clients because PGMA‚s appointees in the Supreme Court did not cooperate as expected? Is there basis to suspect impropriety on the part of our judicial department? If the Court of Appeals decides in favor of Blue Ridge, will it be because some of these forces at play? Or is Malacanang being unreasonable? Whatever the answers are, one thing is for sure. Many companies and individuals are finding themselves being caught in the middle as hapless victims in this power play.

For comments, e-mail at [email protected]