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Negotiation resumes between CUC and Mobil on fuel contract
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Posted on May 23 2005
The Governor’s Office and the Commonwealth Utilities Corp. will resume bargaining talks with Mobil Oil Marianas Inc. today for a long-term fuel supply contract.
Lt. Gov. Diego T. Benavente, who is leading the government’s negotiating panel, said no talks took place between the parties yesterday, the fourth day since Gov. Juan N. Babauta declared a state of disaster emergency and assumed full control of CUC.
“We will start negotiating again with Mobil tomorrow [Tuesday], this time for a long-term contract. I really can’t tell how long it will take,” Benavente said.
Among other things, the talks will address the terms for the payment of CUC’s $8.5-million overdue debt to Mobil, which the utility firm incurred over the course of its two-year contract with the oil company.
Last Friday, the government succeeded in solving CUC’s emergency fuel needs by getting Mobil to deliver 1.4 million gallons on June 2, 2005. The delivery is expected to provide CUC enough fuel to run its power generators through June.
Due to recurring power outages, Gov. Juan N. Babauta declared a state of disaster emergency and subsequently assumed control of CUC, for a period of 30 to 90 days.
In his State of the Commonwealth Address on May 19, Babauta blamed the power crisis largely on CUC’s lack of a long-term fuel contract.
CUC has failed to enter into a new fuel contract since its previous deal with Mobil expired on April 30. As a result, the utility firm was forced to purchase fuel on an emergency procurement basis, paying for the product in cash and by shipment.
