Palawan asserts revenue share in Malampaya gas project

27 July 2011

By Anna Valmero

QUEZON CITY, METRO MANILA— Although the Supreme Court is yet to issue its decision, Palawan governor Abraham Mitra said the province is entitled to 40 percent of revenues generated by the Malampaya natural gas project.

Malampaya is 80 kilometers northwest of Palawan's main island.  The High Court is yet to issue a decision on a legal dispute on the ownership of the Malampaya gas field.

“I hope the Department of Energy (DoE) will keep in mind that Palawan has a legal right to 40 perent of the government’s share from the Malampaya gas project based on what the Local Government Code says,” Mitra said.

According to reports, the DoE has reported that proceeds from the Malampaya project hit P200.41 billion (or $4.64 billion) since its commercial operation in 2002.

Located some 3,000 meters below sea level, Malampaya has about 2.7 trillion cubic feet of natural gas reserves, according to findings of Shell Philippines Exploration B.V. (SPEX) on behalf of joint venture partners Chevron Malampaya LLC and the PNOC Exploration Corp.

Mitra said Palawan has territorial jurisdiction over the project and is thus entitled to 40 percent share of its revenues.

The DoE and the Department of Budget and Management (DBM) should make a proper accounting of Malampaya proceeds and provide the Palawan local government a copy of the exact figures for transparency, he added.

DoE has announced plans to sign a $1.5 billion expansion project for Malampaya.

“Although the case is still pending in the Supreme Court, the concerned agencies must not disregard Palawan’s rightful share and must be included in the accounting of the said revenues. We have to keep track of what rightfully belongs to Palawan,” said Mitra.

The governor also called for a thorough review of the recommendation of the Commission on Audit for Congress to appropriate revenues from the Malampaya project to pay off public debt and augment the depleting funds of the national government.

“This recommendation would be totally against what is stipulated in the Local Government Code,” said Mitra.

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