Cusi should resign, face charges for Malampaya share sale — Gatchalian
MANILA, Philippines — Sen. Win Gatchalian said Wednesday that Energy Secretary Alfonso Cusi must resign from his post and face charges, after pointing out that the department allegedly "railroaded" the approval of share sales in the Malamapaya gas field.
The Malampaya project is the country's only indigenous gas field which supplies power to five plants in Luzon. The deepwater-to-gas project powers over four and a half million homes and businesses in Mega Manila, and contributes to almost 20% of the country's power generation mix.
“I call on Secretary Cusi and his erring subordinates to immediately resign. With all that has happened, the Filipino people can no longer trust you to faithfully safeguard our country’s precious energy resource," Gatchalian said in an emailed statement sent to reporters on Wednesday.
In a Senate privilege speech, he claimed that the Department of Energy (DOE) "violated not only the law, but even its own department circular, in railroading the approval of the transfer of a substantial participating interest in Malampaya to a company that the DoE knew to be financially unqualified to own it."
Gatchalian, who chairs his chamber's energy committee, was referring to the deal between a subsidiary of the Dennis Uy-led Udenna Corp and Chevron Malampaya LLC Philippine branch (CMLLC PH).
On October 2019, Udenna unit UC Malampaya entered into a share sale and purchase agreement to buy the stake of Chevron Philippines in CMLLC PH, which held 45% of participating interest in the Malampaya project. After the transaction, CMLLC PH changed its name of UC 38 LLC.
This particular transaction requires government approval based on the UC Malampaya's legal, technical and financial capabilities.
"DOE in its financial evaluation, evaluated the wrong entity, UC 38 LLC, instead of UC Malampaya," Gatchalian said in the summary of the committee report about the transaction.
"It failed to evaluate UC Malampaya which was, based on the DoE's own admission, not financially qualified as it has a negative working capital of $137.156 million, which is clearly insufficient to meet its proportionate share in the work program and budget for 2020 amounting to $64.455 million," he added.
The senator also alleged that Cusi and his officials violated the law, and acted in "with manifest partiality, evident bad faith, and/or gross inexcusable negligence in approving or recommending approval of the Chevron-UC Malampaya transaction."
He said that this points to a violation of DoE Department Circular 2007-04-0003, or the guidelines for the transfer of rights and obligations in petroleum service contracts.
With this, Gatchalian suggested to the Ombudsman to file criminal cases against Cusi, and several of his officials including Undersecretary (USec) Donato Marcos, USec Robert Uy, former Assistant Secretary (ASec) Bodie Pulido, ASec Gerardo Erguiza, Energy Resource Development Bureau Director Cesar Dela Fuente, Legal Services Director III Arthus Tenazas, Financial Services Director III Araceli Soluta, and four others for violating the Anti-Graft and Corrupt Practices Act.
Cusi 'mulling over' a reasonable response
On late Wednesday, DOE Secretary Cusi said he is reserving his comments until he gets ahold of the Senate resolution with Gatchalian's claims.
"I have taken note of what the Senator has said today. I am mulling over a reasonable response to what he said to the media," Cusi said in a statement shared by the DOE on Viber.
"I shall issue my response as soon as I get hold of the Senate resolution," he added.
Udenna Corp., through its spokesperson on Wednesday evening, maintained that its transaction with Chevron is a private sale conducted at the parent company level, adding that this did not involve "any transfer of any rights of obligations." Because of this, it argued that securing DOE's approval was not required.
"The Chevron transactions followed competitive bidding processes with rigorous due diligence conducted by Chevron, the international lenders involved and the other parties in the SC38 consortium," Raymond Zorilla, Udenna spokesperson, said in an emailed statement.
"We appreciate as well the demonstrated vigilance of the DOE and Secretary Alfonso Cusi for conducting a detailed review even though not required by law, and to which all parties cooperated in," he added.
On Thursday morning, Gatchalian said he filed the Senate resolution seeking to file the criminal and administrative charges against Cusi and the allegedly erring DOE officials for clearing the Chevron-UC Malampaya transaction.
- Latest
- Trending
