NG wants 40% of Malampaya revenues

MANILA, Philippines - The Aquino administration wants 40 percent of the revenues from the Malampaya natural gas project off Palawan to now go to the National Government following the expiration of an agreement between the government and the local government of Palawan, Budget Secretary Florencio Abad said yesterday.

The two parties are in an ongoing legal battle over the 40-percent share from the Malampaya proceeds but Abad said that the two agreed in the past through a Memorandum of Understanding (MOU) to share the 40 percent. However, he also said the MOU expired last June 30.

As such, he said that since the MOU between the National Government and the local government of Palawan has already lapsed last June, all of the 40 -percent share in the revenues should be remitted to the Bureau of the Treasury (BTr).

“Since the agreement no longer operates, then all the proceeds should now go to the National Government,” Abad said.

The budget chief said the proceeds should now go to the general fund to finance the operations of the government. “That’s part of the government fund,” Abad said.

The government is entitled to a share in the proceeds involving the discovery, exploration, development, and production of indigenous energy resources as mandated under Presidential Decree 87 or the “Oil Exploration and Development Act of 1972”, PD 972 or the Act to “promote and accelerated exploration, development, exploitation, production, and utilization of indigenous energy resources.

However, the National Government said Palawan should not have a share in the revenues because the project is located off northwestern Palawan.

The Malampaya natural gas project is operated by a consortium led by Shell Philippines Exploration B.V and the Philippine National Oil Co. Exploration Corp., the government’s exploration arm.

The natural gas project has since become the largest single investment in the country, with revenues expected up to $10 billion over a period of 20 years.