Gov’t re­jects PXP pro­posal to take over Malam­paya

Business World - - Front Page - V. Saulon Victor

THE GOV­ERN­MENT has re­jected the un­so­licited pro­posal of listed ex­plo­ration com­pany PXP En­ergy Corp. to take over the Malam­paya gas ex­plo­ration ser­vice con­tract, En­ergy of­fi­cials said on Mon­day, ex­plain­ing that the process is not al­lowed un­der ex­ist­ing rules.

"We ad­vised PXP that we can­not take cog­nizance of their un­so­licited pro­posal," Depart­ment of En­ergy (DoE) As­sis­tant Sec­re­tary Leonido J. Pulido III told re­porters when asked for an up­date on the pro­posal dur­ing a brief­ing at the agency's head of­fice in Taguig City to ob­serve the “Na­tional En­ergy Con­scious­ness Month.”

“The rea­son is very ba­sic. We have what we call the PCECP (Philip­pine Con­ven­tional En­ergy Con­tract­ing Pro­gram).”

He said the pro­gram gives pro­po­nents only two ways to get a ser­vice con­tract to ex­plore the coun­try's oil and gas re­sources. PCECP is the depart­ment's ini­tia­tive to re­vive ex­plo­ration ac­tiv­i­ties in the coun­try. The DoE iden­ti­fied 14 ar­eas with po­ten­tial for oil and gas finds and of­fered these for com­pet­i­tive bid­ding. Pro­po­nents can also nom­i­nate ar­eas out­side the list.

Mr. Pulido said what PXP did was out­side the pro­vi­sions al­lowed un­der PCECP. He said Malam­paya is un­der Ser­vice Con­tract (SC) 38, which is al­ready held by pri­vate en­ti­ties. “So we had to deny the un­so­licited pro­posal of PXP,” he said.

On Nov. 12, PXP said it had sub­mit­ted on Nov. 11 an un­so­licited pro­posal to the DoE for the “strate­gic devel­op­ment and uti­liza­tion” of an in­te­grated gas hub in Malam­paya when SC 38 ex­pires in 2024. The up­stream oil and gas com­pany also of­fered to ac­quire the 45% stake of Chevron Malam­paya LLC in SC 38, which is lo­cated off­shore north­west of Palawan.

PXP is a unit of Philex Min­ing Corp. which in turn is one of the Philip­pine units of Hong Kong-based First Pa­cific Com­pany Ltd, the oth­ers be­ing Metro Pa­cific In­vest­ments Corp. and PLDT, Inc. Hast­ings Hold­ings, Inc., a unit of PLDT Ben­e­fi­cial Trust Fund sub­sidiary Me­di­aQuest Hold­ings, Inc., has in­ter­est in Busi­nessWorld through the Philip­pine Star Group, which it con­trols. —

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