The sale of Dennis Uy's majority shares of the Malampaya gas field to Razon-led Prime Infrastructure Holdings Inc. should go through "strict" approval process by the next leadership of the Department of Energy (DOE) to uphold the public's interest in handing over the ownership of that key energy gas-to-power project in the country, Senate Committee on Energy Chairman Sherwin T. Gatchalian urged.

Gatchalian emphasized that incoming energy officials must “ensure that existing laws and prescribed regulations are followed before giving its consent to the impending entry of Prime Infra in the Malampaya gas-to-power project.”

It could be recalled that the initial acquisition by Uy-owned Udenna Corporation of the 45 percent Chevron shareholdings in Malampaya was rocked with controversies, including the manner as to how the DOE had approved the transaction.

Gatchalian investigated how the Udenna-Chevron deal had been consummated, raising a number of legal questions, not just on the government’s approval of the transfer of shares’ ownership, but also on the financial capacity of Udenna as a buyer.

"The mere fact that the business unit of Dennis Uy’s Udenna Corp., which took over the 45-percent stake of Chevron Malampaya LLC, is now disposing of its hold in the gas field project negates the DOE’s earlier assertions that UC Malampaya Philippines Pte. Ltd. was financially and technically capable from the very beginning,” said Gatchalian.

Given questions on the financial standing of Udenna then, Gatchalian previously recommended that the government, through state-run Philippine National Oil Company-Exploration Corporation (PNOC-EC), should have better exercised an option to acquire the Malampaya shares instead.

But with the company of billionaire Enrique Razon now entering as a buyer of Uy's shares in Malampaya, Gatchalian is persistently calling on the incoming DOE leadership to exercise prudence in reviewing and evaluating not just the financial stature but also the technical capacity of the next operator of the gas field.

He thus apprised incoming energy officials that “the law is clear - that Department Circular 2007-04-0003 mandates that the rights and obligations under a petroleum service contract executed under Presidential Decree 87 shall not be assigned or transferred without prior approval of the DOE.”

Gatchalian further prodded the DOE to pursue prior evaluation of that new merger and acquisition (M&A) deal for the Malampaya venture instead of just reviewing and approving the transaction after financial closing had already been completed by the parties-in-interest.

He also reminded the energy department that the consent of the other members of the Malampaya consortium shall be firmed up first prior to giving go-signal to the sale of the shares to Prime Infra.

“Such a transaction requires securing the consent of other members of the Malampaya consortium that includes the state-owned PNOC-EC which holds the remaining 10-percent interest in Malampaya,” the solon reiterated.