PALACE MUST FULLY EXPLAIN REVOCATION OF OIL
DEVELOPMENT CONTRACT WITH MALAYSIAN FIRM

Senate Minority Leader Aquilino Nene Q. Pimentel, Jr. (PDP-Laban) today said Malacañang must be given a chance to fully explain its decision to revoke the contract awarded to Malaysian-based Mitra Energy Ltd., for the development of the oil deposits in the Camago-Malampaya field off Western Palawan.

Pimentel said a Senate inquiry into President Gloria Macapagal-Arroyos decision to unilaterally terminate the contract is in order in view of the allegation by Mitra Energy that it was made without due process and without explanation.

This is a valid issue that should be looked into by the Senate, the minority leader said.

The revocation of the contract resulted from the Presidents issuance of Executive Order 556 backdated June 17 which supposedly requires the conduct of public bidding for projects like this.

Mitra Energy cried foul over the cancellation of the deal which the company said it won fair and square and for which it has already spent upwards of a million dollars and a great deal of time.

Pimentel said he is deeply concerned over the consequences of the governments decision in terms of scaring away foreign investments especially in view of apprehensions over the sanctity of contracts in the country.

The circumstances that led to the revocation are not clear, Pimentel said. Mitra deserves to be given an explanation why through the Presidents subordinates.

The senator said there is an urgent need on the part of the government to defuse the controversy arising from the revoked contract especially in the wake of insinuation that the government came under pressures from influential Filipino business interests which are preventing foreign firms from bagging the oil project.

Pimentel warned that any failure by the Palace to address all these questions would merely fan the controversy and give rise to all kinds of speculation in which the government will find itself at the losing end.

Considering the situation now where the President has prohibited Executive officials from attending Senate hearings, people can only speculate that somebody pulled strings and somebody stands to gain by it, he said.