THE DEL ROSARIO-MVP CONSPIRACY

Posted on August 11, 2014

By the OpinYon Research Team

Are members of President Benigno S. Aquino’s family of officials serving the interests of the country? Some in the President’s cabinet are loyal to the country. Some are likely serving business interests, like Department of Foreign Affairs (DFA) Secretary Albert Ferreros del Rosario and Cabinet Secretary Jose Rene Almendras.

In the case of Almendras, his alliance with Senator Sergio Osmeña on the energy crisis that the country is facing is an open secret. Almendras, former DOE head until his transfer to his current post as cabinet secretary, is known to be the inside guy of the Aboitiz business group, while Sen. Osmeña is married to a Lopez sibling. Both Aboitiz and the Lopezes are big players in the power sector.

Almendras and Osmeña, despite their pro-people posturings, fail to fool the people of their true color. But at least, they have not led us to an almost shooting war with a superpower.

In the case of del Rosario, OpinYon brings you back to 2012, when we almost went to war against China. Here, the OpinYon research team picks up a “secret” leak sent to us.

The Scarborough Incident
Last April 2012, tensions arose around Scarborough Shoal when Philippine Navy and Coast Guard vessels had a stand-off with Chinese Marine Surveillance vessels.

Although the situation eventually normalized after a couple of months, the fiery exchange of rhetoric between the two countries continue. Leading the charge on the side of the Philippines is none other than its Foreign Affairs head, Secretary Albert del Rosario.

While Sec. del Rosario reaped praises for his patriotic stance against a rising superpower, information about his true motives, however, started leaking out.

What is Sec. del Rosario’s true agenda? Is he truly a patriot?

Backdoor Negotiator
In a meeting in Malacañang sometime in early May 2012, Secretary del Rosario was asked by President Aquino, who authorized the trip of Manuel V. Pangilinan (MVP) to China to talk to Chinese officials?

Secretary del Rosario owned up to the responsibility when he said that he “sort of encouraged Pangilinan to go and open another channel to China through the private sector since the political channel has failed.”

However, instead of talking to Chinese officials to defuse the situation in Scarborough Shoal, MVP talked to the China National Offshore Oil Corp. (CNOOC) officials to pursue personal business interests. His report to the President is detailed in the following Aide Memoire:

 

 

Manny V. Pangilinan is the chairman of Philex Mining, which owns 65 percent of Philex Petroleum, which in turn owns 60.49 percent of Forum Energy.

Forum Energy owns 70 percent of the Service Contract 72, a seven-year exploration contract in the Reed Bank awarded by the Philippine government in 2010. By August 2013, it is committed to dig two wells in Sampaguita under its work program with the government.

(SOURCE:http://www.ellentordesillas.com/2012/09/21/the-back-channels-trillanes-
us-and-pangilinan/)

Based on the estimate of Forum Energy PLC in 2011, the Sampaguita field contains 2.6 trillion cubic feet of contingent in place gas resource and 5.5 TCF of prospective in place gas resource.

(SOURCE: http://www.forumenergyplc.com/operations/oilandgas/reed-bank.aspx)

The Del-Rosario-MVP Connection

Sec. Albert del Rosario has been involved in companies run by MVP, being director of the Philippine First Pacific Co. (Hong Kong), PT Indofood Sukses Makmur Tbk, the largest food company in Indonesia; Philippine Long Distance Telephone Co., Metro Pacific Investments Corp., Philex Mining Corp., Metro Pacific Tollways Corp., Metro Pacific Tollways Development Corp., Manila North Tollways Corp. and ABC Development Corp.

Sec. del Rosario has headed the development of Pacific Plaza Towers, Metro Pacific Corp.’s signature project. He is said to have introduced Pangilinan to the Salim family of Indonesia, which is behind First Pacific.

MVP as chairman and chief executive officer of Philex Mining Corp, owns 74.79 percent of Philippines Petroleum Corp. Philex Petroleum owns 64.45 percent of Forum Energy Plc. (FEP), an oil and gas exploration company incorporated in the United Kingdom with focus on the Philippines.

(SOURCE:http://www.ellentordesillas.com/2012/09/21/the-back-channels-trillanes-us-and-pangilinan)

Forum Energy has secured a two-year extension from the original deadline of August 2013 for its work program under Service Contract 72 in light of the territorial dispute between Philippines and China.

In December 2012, DOE announced that it has deferred to the Department of Foreign Affairs the decision to grant permits concerning the exploration and drilling activities at the highly contested Recto (Reed) Bank because the area was part of the disputed waters being claimed by China.

In short, the go signal for the drilling activities of MVP’s Forum Energy lies in the hands of his best friend, Secretary Albert del Rosario.

(SOURCE: http://business.inquirer.net/104849/oil-drilling-group-gets-2-year-extension; http://www.interaksyon.com/business/50708/doe-serves-notice-that-oil-gas-projects-in-contested-territories-would-face-delays)

Why is MVP, through Sec. del Rosario, delaying the exploration drilling of Service Contract 72?

Sec. del Rosario is using the tension in Scarborough Shoal as a pretext to suspend the exploration drilling of SC 72. However, in light of the fact that the situation in Scarborough has normalized, plus the fact that MVP’s Forum Energy is in partnership with CNOOC of China, then obviously this is not the true reason for the delay.

What now is the real reason for the delay?

Findings of US Energy Information Administration

Several countries have overlapping territorial claims to portions of the South China Sea, which stretches from Singapore in the southwest to Taiwan in the northeast. The Spratly Islands and Paracel Islands are two of the most contested areas (see dark blue islands on map above). However, unlike other parts of the South China Sea, these areas have not been assessed to hold large (conventional) resources of oil and natural gas. Under the United Nations Convention on the Law of the Sea, ownership of habitable islands can extend the exclusive access of a country to surrounding energy resources.

EIA’s analysis shows that most fields containing discovered oil and natural gas are clustered in uncontested parts of the South China Sea, close to shorelines of the coastal countries, and not near the contested islands. Industry sources suggest almost no oil and less than 100 billion cubic feet of natural gas in proved and probable reserves exist in fields near the Spratly Islands. The Paracel Island territory has even less natural gas and no oil.

(SOURCE: US Energy Information Administration, http://www.eia.gov/todayinenergy/detail.cfm?id=10651)

In addition to proved and probable reserves, the South China Sea may have additional hydrocarbons in underexplored areas. The U.S. Geological Survey (USGS) estimated in 2012 that about 12 billion barrels of oil and 160 trillion cubic feet of natural gas might exist as undiscovered resources in the South China Sea, excluding the Gulf of Thailand and other adjacent areas. About one fifth of these resources may be found in contested areas, particularly in the Reed Bank at the northeast end of the Spratly Islands, which is claimed by China, Taiwan, and Vietnam. These additional resources are not considered commercial reserves at this time; extracting them may not be economically feasible.

(SOURCE: US Energy Information Administration, http://www.eia.gov/todayinenergy/detail.cfm?id=10651)

Based on the above, it is clear that it is in the interest of business partners, MVP and Sec. del Rosario, to delay the drilling in SC72 (Reed Bank) because Forum Energy had bloated the gas and oil reserve estimates of SC72 (2.6 trillion cubic feet of contingent in place gas resource and 5.5 trillion cubic feet of prospective in place gas resource) and, therefore, had grossly overvalued their stocks.

Once the drilling starts, the true value of the reserves in SC72 would be known and MVP’s partners/stockholders at Forum Energy would start bailing out. MVP stands to lose billions.

This explains the antagonistic stance of Sec. del Rosario (through DFA) towards China. He just needs a continuing pretext to delay the drilling until MVP finds an unwitting buyer of their stake and leave their other partners/stockholders holding the empty bag.

Sec. Albert del Rosario is no patriot after all.