Senate may ask for ‘fraud audit’ on DoE, PNOC on Malampaya issue

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Senate Energy Committee Chairman Sherwin T. Gatchalian on Thursday said there’s a possibility that the committee will ask the Commission on Audit (COA) to conduct a “fraud audit” on the Department of Energy (DoE) and the state-owned Philippine National Oil Company (PNOC).

“It’s highly possible that we will request COA to conduct a fraud audit, although we haven’t triggered that yet since we are focused on the process and on the basis for the controversial approval by the DoE,” Mr. Gatchalian said during a virtual forum with the National Youth Movement for the West Philippine Sea.

“We’re looking at the scope of the fraud audit. We have to make sure that if we trigger this, the objective is clear and that the COA knows what to look at,” he said.

In 2019, Davao-based businessman Dennis A. Uy’s Udenna Corp., through its subsidiary UC Malampaya, acquired Chevron Malampaya LLC’s share in the project for nearly P28.6 billion. The deal was approved in April.

In previous statements during the senate hearing on the Malampaya deals, Mr. Gatchalian said that the deal between the DoE’s approval of Chevron Malampaya LLC’s transfer of its 45% interest in Malampaya to Udenna subsidiary UC Malampaya (Pte Ltd.) was rigged.

Fraud audits are usually done through a detailed investigation of financial statements, and since the COA can only audit government entities, Mr. Gatchalian said the Senate will have to be very objective so that the COA will not go beyond its boundaries.

The audit commission, said Mr. Gatchalian, can audit the 60% royalty share of the government to see if the government is receiving its fair share, which the Senate can use to derive what the other entities are getting.

“PNOC is a 10% consortium holder and being under the Government-Owned and Controlled Corporations (GOCC), [it] also falls [under] the ambit of COA,” Mr. Gatchalian said.

In May, another Udenna unit, Malampaya Energy XP, bought out SPEx, which had held a 45% operating interest in the Malampaya gas field, for P23.2 billion.

Aside from the Chevron Malampaya stake, Mr. Uy bought Shell Philippines Exploration BV’s (SPEx) stake, through another Udenna subsidiary, Malampaya Energy XP, for P23.2 billion. SPEx had held a 45% operating interest in the Malampaya gas field.

When approved, Mr. Uy will hold a 90% stake in the Malampaya natural gas field, which fuels power plants providing 30% of Luzon’s power demands.

The Malampaya deals have been under fire since the Senate Committee on Energy questioned the transactions in November 2020.

In October, three concerned citizens filed a criminal complaint before the Ombudsman against officials of the DoE, Udenna, Chevron Malampaya LLC, SPEx, and the PNOC-Exploration Corp. (PNOC-EC).

Last week, Senator Ana Theresia N. Hontiveros filed a resolution urging the Senate Blue Ribbon Committee to investigate the “propriety” of Udenna Corp.’s takeover of the country’s fossil energy assets. — Marielle C. Lucenio

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