Razon defends Malampaya renewal deal

MANILA, Philippines —  Tycoon Enrique Razon defended the renewal of the contract to operate the Malampaya deep water gas-to-power project, saying that it is a critical step toward averting a looming power crisis in the country.

Razon, chairman of  Malampaya consortium lead Prime Infrastructure Capital Inc., responded to the criticism of former Philippine National Oil Co. president Eduardo Mañalac against the 15-year extension of the contract.

“While we celebrate the Malampaya contract renewal as a critical step to avert a power crisis, Mr. Eduardo Mañalac is using this development to push his own agenda, making unsubstantiated claims against the SC 38 consortium,” Razon said.

Prime Infra, through subsidiary Prime Energy Resources Development B.V., leads the Service Contract 38 consortium which holds the license to operate the Malampaya gas field in offshore Palawan.

Other members are UC38 and state firm Philippine National Oil Co.-Exploration Corp.

President Marcos signed early this week the service contract renewal agreement up to 2039, allowing the continued utilization of the remaining reserves of the Malampaya gas field, as well as further exploration and development of its untapped potential.

Malampaya, touted as the country’s energy crown jewel, has been supplying natural gas to four power plants – Santa Rita, San Lorenzo, San Gabriel, and Avion – in Batangas province that generate a fifth of the country’s electricity needs.

In a television interview with ABS-CBN, however, Mañalac said the government, through PNOC, should have just taken over the deal so that it can enjoy 100 percent of the earnings from the gas field instead of just getting a 60 percent share.

He likewise said keeping it in the hands of the private sector would translate to “losses for the government.”

But Razon said it was “appalling to hear Mr. Mañalac argue for the supposed ‘losses for the government or the Filipino people’ when we know that he is the same character who brokered the tripartite agreement for the Joint Marine Seismic Undertaking (JMSU) among the Philippines, Vietnam, and China, essentially compromising Philippine territory by allowing the two countries to explore our natural resources.”

Razon was referring to the 2005 JMSU which the Supreme Court had declared unconstitutional early this year.

“To what degree are you patriotic as you advocate for the state’s acquisition of a vital power asset, despite having a questionable history of attempting to compromise Philippine territory? Whose interests are you truly serving, Mr. Mañalac? If this is Mr. Mañalac’s attitude toward Philippine sovereignty, is he so deeply offended by the fact that the Malampaya gas field is now under the operation of an entirely Filipino consortium, a development that should be a source of pride for all of us?” Razon said.

Energy Secretary Raphael Lotilla, for his part, said it would have been difficult for the government to operate Malampaya because of the immediate work needed.

“We want the drilling to start as soon as possible. We cannot wait for 2024,” Lotilla said.

Razon said the Malampaya consortium consists of “world-class talent,” correcting Mañalac’s assertion that the people now running the project are incompetent and inexperienced.

“These are the same people working tirelessly to achieve our vision of energy security and independence,” Razon said.

Prime Infra is led by its president, veteran critical infrastructure expert Guillaume Lucci while subsidiary Prime Exploration’s general manager is Sebastian Quiniones Jr., former general manager and managing director of Malampaya operator SPEX.

Other executives of the consortium are UC38 president Belinda Racela who was president of Chevron Malampaya and PNOC Exploration Corp. president Franz Alvarez.