ENERGY Secretary Alfonso Cusi said that the Department of Energy (DoE) welcomes the recent decision of the International Chamber of Commerce (ICC) in Singapore on its arbitration of the US1.1-billion tax case between the Malampaya consortium and the Commission on Audit (CoA).
In an interview with Malacañang reporters, Secretary Cusi said that the latest development in the ICC arbitration case is beneficial to the country’s energy program.
“We have always upheld the position that the tax regime for petroleum service contracts is legal and valid,” Cusi stressed. “This victory would go a long way in giving exploration and development activities in the country a much needed and long overdue boost as investors will now have renewed confidence in our upstream gas industry,” Cusi added.
The DoE has been urging investors to “explore, explore, explore” to help the country build its power supply. “We have been grossly trailing behind our neighbors in terms of petroleum exploration and development activities. It is high time that we step up. We need to attain energy security and sustainability to minimize our vulnerability to global oil price shocks,” Cusi said in an interview last year when the department launched a new round of their energy-contracting exploration program, in the hope of luring many downstream oil-industry players.
The ICC decided in favor of the Malampaya consortium, with a unanimous vote of 3-0. The International Chamber of Commerce is a global organization that provides services to resolve disputes in international business, with headquarters in Paris, France. Service Contract 38 which governs the Malampaya project, provides for dispute resolution under the arbitration rules of the ICC.
A few days ago, Senate Committee on Energy chairman Senator Sherwin “Win” Gatchalian also issued a statement saying that the arbitration decision of the ICC is good news for the country’s energy program.
Gatchalian, the proponent of the Drill Drill Drill program, said that with this favorable decision of the tribunal, the country may now tap oil and gas resources and use them to achieve Philippine energy independence and pave the way for the country to become an energy exporting powerhouse.