Gov. Joel Reyes told reporters in Puerto Princesa City yesterday that negotiations with the national government on the proposed financial assistance package for Palawan have reached a deadlock.
With the deadlock, Reyes said the provincial government will no longer pursue its memorandum on agreement on the financial assistance package that the national government is offering.
"We have no other recourse but to pursue our legal claim from the Camago-Malampaya natural gas project through litigation," he said.
Reyes urged the provincial board to pass a resolution terminating the negotiations.
Sought for comment, the Department of Energy said it would study its strategy on the possible legal action by the Palawan provincial government.
"(We) would check that out first," Energy Undersecretary Jose Victor Emmanuel de Dios said.
Shell Phils. Exploration B.V., the main operator of the $4.5-billion Malampaya project, was supposed to start paying royalties to the national government in the last quarter last year.
But Energy Secretary Vincent Perez earlier said the government’s first possible earnings from the natural gas project would be given during the latter part of 2003.