Government drops plan to sell 10% stake in Malampaya

MANILA, Philippines - The Aquino administration has dropped the previous administration’s plan to sell the much-coveted stake in the Malampaya deep water-to-gas project, recognizing that this is a crown jewel in the power sector.

Finance Undersecretary for Privatization John Philip Sevilla said the Department of Energy has other plans for the government’s Malampaya stake which is why the government has decided not to sell this anymore.

“We are no longer pursuing that,” Sevilla said.

He said that aside from the fact that it is crown jewel in the power sector, Sevilla said that the government would be focusing on other items for privatization.

These include the 108-hectare Food Terminal Inc.  agro-industrial property in Taguig.

The Macapagal-Arroyo administration had attempted to sell PNOC-EC’s 10-percent stake in Service Contract 38 last year.

In 2008, proponents of the project remitted to the government a total of P13 billion.

Service Contract 38 covers the right to explore, develop and utilize Malampaya gas off the province of Palawan. PNOC-EC, Shell Philippines Exploration B.V. (SPEX) and Chevron Malampaya LLC are partners in the exploration and development of this service contract.

The Macapagal-Arroyo administration had attempted to sell PNOC-EC’s 10-percent stake in Service Contract 38 for at least P17 billion as part of its privatization program but critics from the Energy sector dubbed this as a “midnight transaction.” 

Essentially, the sale of its stake in Service Contract 38 means that the government is selling its much-coveted stake in the Malampaya project, considered a crown jewel in the energy sector. 

Sevilla said the priority for now is the sale of FTI which has attracted anew big-ticket players such as the Gokongwei group’s Robinson’s Land Corp.