Malampaya sellout – Miriam Coronel Ferrer

By MIRIAM CORONEL FERRER
ABS-CBN News; 03/13/2010

Everyone has been focused on the election trail, and while we’re not looking, the government is fast tracking the selling of valuable government assets.

The issues surrounding the selling of the Food Terminals in Taguig and the real estate owned by government in Fujimi, Japan have already come out in the open. But still outside of the public glare is the ongoing negotiation to sell the 10 percent share of the government in the Malampaya oil field.

If Malacanang manages to arm twist the Philippine National Oil Company-Exploration Corporation (PNOC-EC) board to sign the deed of sale – and it seems they are trying their darnedest to pull this through — the billions of fresh funds from the sale will immediately prop up the sagging coffers of this administration. But the Filipino people and Philippine government will lose forever significant and potentially higher annual revenues from the resource in the next 20 years.

Gas from Malampaya fuels the 2,700 megawatt power plant in Batangas. So far, Malampaya is the biggest oil and gas producing field in the country. It is estimated to contain 3 trillion cubic feet of gas and 40 million barrels of recoverable oil reserves. However, there are indications that it has much more in store not only in the Malampaya structure, but also in the nearby prospects that Shell and the Service Contract 38 joint venture have identified and will be drilling soon.

The government plans to sell Malampaya for about US$300 million or P14 billion. In 2008, the PNOC-EC earned P3.08 billion, most of which came from Malampaya earnings. At this rate, and assuming steady gas prices and volume of sales, it can easily raise the $300 million in six years without having to sell the goose that lays the golden egg.

In fact, the Malampaya consortium has already fully recovered its initial $4.5 billion investment. It started operation only in 2001.

Obviously, disposing of the asset now will immediately strip the government, starting with the next administration, of a sustained and significant revenue source.

Without the Malampaya asset, the PNOC-EC’s net worth would be decimated. It won’t have the capacity to invest in other exploration projects.

The government plan is to eventually sell 60 percent of the PNOC-EC. But without the Malampaya goose, it won’t fetch much. If it sells PNOC-EC with its Malampaya share intact, it can fetch a much higher value for the same share. So why is the government so keen to sell the shares now?

This is the not the first time, the GMA administration tried to sell the participating interest of the PNOC-EC in Malampaya. In 2005, it approved the sale of half of Its participating share to the Korean LG company. But several people in government managed to block the planned sale. With only three months to go before a new administration takes over, high-ranking government officials are once more working fast to swing a deal asap.

Speculations as to motives are naturally rife when a government-brokered deal is evidently unwise from a business investment point of view and fraudulent from a governance perspective. Some surmise the funds will be diverted to private pockets, or electioneering. Others think the administration wants to exit without the shameful legacy of a huge budget deficit. That’s why they badly need the green bucks-transfusion. Still others cannot help think of even more sinister plots in the offing, such as the eventual privatization of the much devalued PNOC-EC at bargain prices to a favored investment group.

The president has promised a smooth transition to the next administration. And while we have yet to see through this promise, we have before us very high-ranking government officials hell-bent on using their terminal powers to squeeze the most benefit for themselves.

The president has been filling up all appointive positions with people whom we will have to suffer even after she has stepped down. It seems she will appoint the chief justice of the Supreme Court during the election ban period even at the cost of a constitutional showdown. It is pathetic that an incoming AFP chief’s inaugural speech is a plea for trust, given how little there is on both the appointer and appointee.

And now, we have this impending sell-out of a prime revenue-generating government asset for one more short-term and self-serving gain.

E-mail: mcf178@yahoo.com