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Philippines losing money over anomalous Malampaya contract

Saturday, June 9, 2012

Philippines losing money over anomalous Malampaya contract


“It is an outrage that the government continues to uphold contracts with corporations that seriously put the country and the Filipino people at a perpetual disadvantage.” – Bayan Muna Rep. Neri Colmenares
By INA ALLECO R. SILVERIO
Bulatlat.com

MANILA — The Malampaya gas-to-power project off Palawan has been producing natural gas commercially since 2002. Why is the country not benefitting from it in terms of lower energy costs?

Bayan Muna Rep. Neri Colmenares took the floor recently in the House of Representatives to demand the scrapping of the Malampaya Fund natural gas operations contract as it was losing money for the Philippine government. The lawmaker who is also a lawyer said that if investigations into the finances of the project are executed, there is certainty that various officials from the Department of Energy and the Philippine National Oil Corporation will be found guilty of abuse of authority among other crimes.

The Malampaya Fund was a result of the Service Contract 38, covering the Comago-Malampaya Gas Project, which created a consortium composed of Shell, Chevron and the PNOC, which represented the Philippine government. Malampaya mainly produces natural gas, and its remaining reserves are estimated to be two trillion cubic feet.

“Taking into account the reported 4.66 trillion cubic feet of gas in Rector Reed, these huge natural gas resource could take us out of the stranglehold of the oil firms and foreign players in the energy sector,” Colmenares said. “Our public transportation and our power plants could very well use natural gas which is fifty percent cheaper than the oil provided by the big three oil firms. Giving away our natural gas resources to Shell and Chevron for a song, the delay in the building of the gas pipeline for supposed lack of budget to do so, are examples of stories showing the complete squander of our resources which would have eased the lives of many of our consuming public.”

Colmenares said the Malampaya contract should not be extended for another 13 years and not even a day more.

Anomalies in the contract

According to the lawmaker, there are many anomalies in Service Contract 38. For instance, he said, while most countries would negotiate for at least a 30-40 percent share in consortiums exploiting their resources, Shell and Chevron received 90 percent of the consortium shares and the Philippine government only 10 percent..... MORE

SourceBulatlat.com

URL: http://bulatlat.com/main/2012/06/08/philippines-losing-money-over-anomalous-malampaya-contract/

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