Duterte asks oil exploration chief to resign

By Xave Gregorio and Dessy Rae Bautista, CNN Philippines

President Rodrigo Duterte has asked the country’s oil exploration chief to resign, the Philippine National Oil Company – Exploration Corporation (PNOC-EC), Malacañang confirmed Friday.

Presidential Spokesperson Salvador Panelo said in a statement that Duterte asked Philippine National Oil Company – Exploration Corporation (PNOC-EC) chief executive officer Pedro Aquino to resign as the President has lost confidence in him.

“The President’s order is still in line, and pursuant to his anti-corruption campaign in the government, and underscores once again that there are no sacred cows under this administration,” Panelo said.

PNOC-EC earlier confirmed to CNN Philippines that Duterte asked Aquino to resign effective October 14.

Aquino heeded Duterte’s call, submitting his resignation letter on the same day.

Aquino had been PNOC-EC’s president and CEO since 2012. He was appointed as its chairman of the board in 2007. He also served as its senior vice president from 1993-2008.

A highly-placed source told CNN Philippines that Aquino was asked to resign due to a deal he inked this year with state-owned Russian oil giant Rosneft Oil Company and Hong Kong-based Pionaire Finance Limited without the knowledge of Energy Secretary Alfonso Cusi, the chair of PNOC-EC.

The source said Cusi only learned about the deal after Rosneft requested a meeting with Duterte in time for his five-day official visit to Russia.

Senate Energy committee chair Sherwin “Win” Gatchalian said in a statement that Aquino was suspended for approving a memorandum of agreement with an unnamed Russian firm for the development of multilateral cooperation in oil products and trading, and joint participation in oil refining without the permission from the PNOC-EC board or from Energy Secretary Alfonso Cusi.

“The PNOC is spreading itself too thin by doing different things when its focus should be on oil and gas exploration. The PNOC EC is supposed to be tasked with exploration, but this recent deal shows its intent to go into petroleum trading,” Gatchalian said.

This was not the first deal signed between PNOC-EC, Rosneft and Pionaire. In 2017, the three also inked a trilateral agreement on development of cooperation at an economic forum in Russia. There, PNOC-EC and Rosneft announced their intention to sign a strategic long-term contract for delivery of crude oil to the Philippines.

Cusi knew of this agreement, CNN Philippines’ source said.

This was also not the first time a deal between PNOC-EC and Pionaire left Aquino in hot water.

Aquino and other members of the PNOC-EC board were slapped with graft charges before the Office of the Ombudsman over a joint business venture in international petroleum trade was supposedly disadvantageous to the government. The Ombudsman threw this out in 2018 for lack of evidence.

Duterte has invited Rosneft — an oil company that has earned the ire of China for continuing oil exploration activities in seas it claims — to invest in the Philippines and has also reportedly invited the Russian energy firm to explore in the West Philippine Sea.

Pionaire, on the other hand, has been reportedly blacklisted in Davao Occidental for deception after supposedly asking $4,000 to $5,000 as accreditation from would-be contractors.

But this has not stopped the Hong Kong-based firm from doing projects elsewhere.

Manila is in talks with Beijing on a possible joint oil exploration in disputed areas in the South China Sea.

PNOC-EC may represent the Philippines in working groups with China if there are no companies that have an existing service contract with the government in the areas of joint exploration.

Cusi had said that state-run China National Offshore Oil Corporation has expressed interest in partnering with PNOC-EC in Service Contract 57, located in Northwest Palawan and covering about 712,000 hectares.

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