SC asked to annul Chevron-Udenna Malampaya deal

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Metro Manila (CNN Philippines, September 22) — A petition has been filed before the Supreme Court asking to annul the sale and transfer of shares in the Malampaya gas field off Palawan province.

Former Executive Secretary Ruben Torres filed the petition on Tuesday against the deal between Chevron Philippines, Ltd. and UC Malampaya of Davao-based businessman Dennis Uy for the sale of the former's 45% stake in the deep water-gas-to-power project.

UC Malampaya is a wholly-owned subsidiary of Uy's Udenna Corporation.

"He [Torres] alleged in the petition that the transfer of rights in Malampaya project was 'without the requisite legal, technical, and financial evaluation required by law and regulation,'" his camp said in a statement Thursday. It did not elaborate.

Among the respondents mentioned were former Energy Secretary Alfonso Cusi, and the companies involved.

CNN Philippines sought the respondents' comments, but they have yet to reply.

Meanwhile, Energy Secretary Raphael Lotilla, who was also named as a respondent, said he cannot comment since he has yet to receive a copy of the document.

Torres said Lotilla was included as respondent only because he is the current Energy chief.

Malampaya supplies roughly 20% of the country's energy demand and is one of the most important power sources.

The project site spanning 83,000 hectares is near Reed Bank, a part of the Philippines' exclusive economic zone believed to be rich in oil and gas but is also being claimed by China.

In November 2019, Udenna Corporation announced that it bought all of the shares of Chevron in the Malampaya gas field, which was approved by the Philippine Competition Commission in February 2021.

RELATED: Enrique Razon buys Malampaya operator from Dennis Uy's Udenna

In October 2021, private complainants questioned the share sale before the Office of the Ombudsman as it allegedly forfeited ₱138 billion in profits which the government could have gained had it acquired the shares. They said the government could have also gained ₱42 billion more if it took control for the remaining three years of the Malampaya contract.

In February this year, the Senate of the 18th Congress adopted a resolution seeking criminal and administrative charges against Cusi and other Energy officials for allegedly approving the sale, despite supposedly knowing Udenna was "financially unqualified."

Senator Sherwin Gatchalian also alleged that the Energy Department provided an unwarranted preference to Uy's firm through "manifest partiality, evident bad faith, or gross inexcusable negligence in evaluating and approving the deal."

Udenna said then that it stands by its statement that the deal with Chevron was "a private sale of share conducted at parent company level with no change in the legal entities participating in the SC38 consortium nor any transfer of any rights or obligations."

Cusi, meanwhile, said he was ready to face any charges.

Former President Rodrigo Duterte came to Cusi's defense, saying the Senate's actions to "put in bad light" the Malampaya deal was "unfair to them (government officials) and to the public."