Cusi, Dennis Uy sued for 'anomalies' in Malampaya share sale

MANILA, Philippines — Energy Secretary Alfonso Cusi, Udenna Corp. chairman Dennis Uy and 24 others are facing graft charges before the Office of the Ombudsman over alleged anomalies in the sale of shares in the Malampaya project.

“Concerned citizens” Balgamel de Belen Domingo, Rodel Rodis and Loida Nicolas Lewis filed the criminal complaint on Monday before the Office of the Ombudsman in Iloilo City, according to a statement on Tuesday.

Domingo is a geologist at the University of the Philippines while lawyer Rodis and businesswoman Lewis are both based in the US. In their 48-page complaint, the three said the respondents violated the Anti-Graft and Corrupt Practices Act when they “conspired to give unwarranted benefits and advantage” to Uy, whose company recently took over the Malampaya project.

The transaction, the complainants said, caused “undue injury to the government.”

Last May, Shell Philippines Exploration B.V. announced it sold its 45% share in Service Contract 38 in Malampaya deep water gas-to-power to Udenna, which already owned a 45% stake in the project after Uy purchased Chevron Malampaya LLC’s share in 2020. The remaining 10% belonged to state-run Philippine National Oil Corp. (PNOC).

The gas project, operational since 2001 and accounts for 40% of Luzon’s annual energy requirements, is seen for decommissioning between 2027 and 2029 after a projected decline in energy output starting 2024 — the year the service contract would expire.

Malampaya also generates revenues for both national and local governments in the form of royalties. Last year, the former’s share, which accounted for 60% of total, reached P26.57 billion.

‘Gift to a crony’

At a press conference, former PNOC President Eduardo Mañalac said the share sale did not make sense because the government is poised to earn billions from Malampaya once the service contract expires and the state takes full control of the project.

According to the complaint, the government’s monetary losses from the sale of Chevron’s shares is estimated at P21 billion, which could double to P42 billion a year if combined with Udenna’s deal with Shell Philippines.

The complainants said PNOC has “superior balance sheet” to buy Chevron and Shell’s shares when the two companies announced their plan to exit the project. Cusi had acknowledged that purchasing Chevron’s share is an opportunity for government to invest and “the return will be good”, the complainants added, but PNOC “did not exercise its right to match Udenna’s offer for reasons only known to Sec. Cusi… and other respondent public officers.”

Both Udenna and Cusi did not respond to a request for comment as of reporting.

“If the contractors want to leave, they can leave anytime provided that they have fulfilled their commitments,” Mañalac said in Filipino. “The government should take over Malampaya by 2024. Why are we allowing other people to produce output there and get a share of revenues?”

For his part, retired Supreme Court Associate Justice Antonio Carpio told the same news briefing that the sale of Malampaya shares to Uy is “the biggest presidential gift to a crony.” The Davao-based businessman was among the major campaign donors of President Rodrigo Duterte.

“Whoever continues with service contract must pay for these assets,” Carpio said. “Dennis Uy should pay the government.”