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In March, Ed Mañalac landed on the front page of a leading Manila
daily. The former president of Philippine National Oil Company (PNOC),
according to the paper’s “exclusive” report, was supposed to
give testimony on the then-raging controversy over the National
Broadband Network project.
The “scoop” turned out to be a bum steer—koryente
in local newsroom parlance.
The newspaper in question dropped Mañalac like
the proverbial hot potato—and, in the process, missed out on more
reliable inside dope about an even bigger irregularity. In fact, the
ex-PNOC boss was—and probably still is—a goldmine of information
on a deal, which has a potentially greater impact on the national
economy than the NBN contract with the Chinese telecommunications
firm, ZTE.
It was about this time two years ago when Mañalac
was eased out of the state-owned PNOC over plans to tap the oil
reserves in the vicinity of the Camago-Malampaya natural-gas
field.
A subsidiary of the oil company, PNOC-Exploration
Corporation (PNOC-EC) offered the development of the oil rim—which
reportedly has petroleum reserves amounting to 25 to 40 million
barrels—to several companies on what industry experts call
“farm-in” basis. Their proposals were thoroughly evaluated in
terms of technical and economic parameters as well as their
individual track record.
Following an evaluation period that lasted three
months and after an extensive review of the various companies’
offers, Mitra Energy won a preliminary letter of award. This meant
that the Malaysian company—in partnership with British Petroleum
and Standard Chartered Bank—could begin negotiations with PNOC for
the so-called Camago-Malampaya Oil Leg (CMOL) project.
Mañalac, a world-renowned geologist who made a
name for himself in Indonesia and China, was brimming with
confidence that the oil rim off Palawan contained enough petroleum
to turn the Philippines into a major oil producer or, at the very
least, slash the country’s oil-import bill by an estimated $200
million.
Mañalac had been honored—not once, but
twice—by China for helping develop its offshore oil reserves in
Bohai. He was just as optimistic that PNOC had finally found the
right partner in Mitra Energy for the full-blast development of the
CMOL.
Unfortunately for Mañalac—and the country,
for that matter, Malacañang had other ideas. Thanks to the
importuning of quarters close to President Arroyo, the award to
Mitra Energy was set aside. Just like that.
PNOC-EC was eventually directed to call for a
rebid as if, according to an industry observer, the CMOL deal was
“a contract to build a highway.” Down the drain went all the
effort—and money—expended by both PNOC-EC and Mitra Energy in
the vetting process.
Mitra Energy had already spent about $1 million
to comply with the technical requirements of its proposal—aside
from nearly a year and a half and thousands of man-hours studying
the oil rim and formulating a plan for safely extracting petroleum
at the soonest time possible.
PNOC had done a tender of the oil rim project
not only to local oil companies but also to those headquartered in
the United States, United Kingdom, Norway, Malaysia, Singapore,
China and Indonesia. A dozen or so companies were invited to submit
offers and eight companies did so. The highly competitive global oil
industry was clearly keeping close tabs of the project—and had
anything irregular taken place in the process, the howls would have
echoed around the world.
Malacañang, however, decided to ignore all
that. Instead, it changed the rules—apparently in order to favor a
veritable unknown in the oil exploration business.
Two years later, even the “full public
bidding” rule that the administration adopted to ease out Mitra
Energy—and allow the entry of the Palace-favored Burgundy
Group—has also been thrown out the window.
Instead of a public bidding, the “Filipino
First” mandate of the 1987 Constitution is now being invoked to
justify awarding the CMOL project to Malacañang’s favorite.
As of this writing, the Department of Energy was
reported set to seal an agreement between Burgundy Global
Exploration Corporation (BGEC) and PNOC-EC to develop the
Camago-Malampaya oil rim.
As expected, the decision to award the CMOL
project to BGEC has stunned industry observers.
Executive Order 556, which the President issued
to halt the agreement with Mitra Energy in 2006, made no mention of
the “Filipino First” policy. All it required was a full public
bidding for all petroleum service contracts.
No wonder then that the country’s reputation
as a place to do business has again taken a hit. Of 180 countries
covered by Transparency International’s Corruption Perceptions
Index (CPI) 2008, the Philippines dropped to the 141st place—from
131st last year.
In the Asia-Pacific region, the Philippines
ranked 25th out of 32 economies.
CPI measures perceived levels of public-sector
corruption, and relies on various expert and business surveys. It
scores countries on the basis of the degree of public-sector
corruption as seen, felt and experienced by businessmen and country
analysts.
How much the mishandling—or worse—of the
CMOL project figured in the highly unfavorable findings of business
surveys on the Philippines, observers can only guess.
But surprised, they are not—and neither are
we.
dansoy26@yahoo.com
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