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'No impact' on fuel supply if 'onerous' Chevron land rental not renewed – DOE

MANILA, Philippines – The Department of Energy (DOE) said there would be "no impact" on the country's fuel supply if oil firm Chevron Philippines' lease contract for a property in Batangas would not be renewed by the government.

"There is no impact on our energy because what we want to do in that place is to be the energy city also," said DOE Secretary Alfonso Cusi.

"We wanted that to become an energy area. We wanted to use that for [liquefied natural gas]," he added.

Cusi added that the property could be transformed into a storage facility for fuel. "We were looking at that as our strategic storage supply, but the storage tanks there are already dilapidated," he noted.

Chevron is renting the 1.2-million-square-meter (sqm) land in San Pascual, Batangas, for use as an oil import terminal. Batangas Land Company Incorporated (BLCI), a subsidiary of state-owned National Development Company (NDC), is renting it out to Chevron Philippines.

Last month, the Department of Finance (DOF) found this contract "onerous" because Chevron Philippines was paying rent for only 74 centavos per sqm, instead of the current fair market rental value in the area, at around P17.90 per sqm. 

As a result, the DOF on January 22 urged NDC's board to dissolve BLCI so that the government can terminate Chevron's lease contract.

In its defense, Chevron Philippines argued that the lease contract complied with Philippine laws and regulations. Company manager for policy, government, and public affairs Raissa Bautista also said they will maintain an open line with the government to discuss the issue. – Rappler.com