House leader thumbs down government takeover of Malampaya

A LEADER of the House of Representatives on Wednesday rebuffed the call of a business group for the government—through the state-owned Philippine National Oil Co. (PNOC)—to take control of the operations of the aging offshore Malampaya gas field.

In a statement, House Assistant Majority Leader Eduardo Gullas said more representative chambers of commerce and industry in the country want the government to “stay out of any business and avoid competing with private enterprises.”

“In fact, we would not be surprised if business groups in the provinces, such as those in Cebu and Davao, tend to perceive the MBC (Makati Business Club) as an elitist club from ‘imperial’ Manila,” Gullas said.

“The whole point of the government’s petroleum service contracting scheme is precisely to let private corporations assume the risk of spending capital to discover and develop our indigenous gas and oil resources,” Gullas said.

Manuel Pangilinan’s PXP Energy Corp., Enrique Razon Jr.’s Monte Oro Resources & Energy Inc., and Jaime Augusto Zobel de Ayala’s ACE Enexor Inc., among others, are already engaged in petroleum service contracting, noted Gullas.

“If they drill an offshore well that won’t flow gas or oil in commercial quantities, then the government does not have to worry about reimbursing them,” Gullas said.

“Right now, we already have Filipino tycoons engaged in petroleum service contracting, so there’s no need for PNOC to come in and compete, more so because the government does not have the wherewithal,” Gullas added.

Also, Gullas said any government acquisition and operation of a new energy asset would be highly regressive, considering that the State has been disposing of them for decades.

“The business community, including the MBC, was actually very supportive of the government’s privatization program in the past, because they participated by buying and then developing the energy assets,” Gullas said.

Gullas recalled that in 2007, under pressure to bridge the budget deficit, the government sold its 60 percent stake in PNOC Energy Development Corp. (PNOC EDC) for P58.5 billion to a partnership led by Lopez-owned First Gen. Corp.

“When the government sold PNOC EDC, nobody protested and said the government should keep the asset because it is the country’s largest and the world’s second-largest geothermal energy producer,” Gullas said.

PNOC EDC was a Philippine Stock Exchange-listed entity with 40 percent of its shares held by the public when it was sold by the government.

“The truth is, the government is a debt-ridden lumbering giant that cannot compete with highly capable private entities in running and growing energy assets,” Gullas said.