PNOC-EC plans secondary offering

State-owned Philippine National Oil Co. (PNOC) plans to undertake a secondary offering of its subsidiary, PNOC-Exploration (PNOC-EC), after the Malampaya deep-water-to-gas project goes on-stream in January 2002.

"I think the government will be able to fetch a good price for PNOC-EC shares if the Malampaya is already on stream," Energy Secretary Vincent S. Perez said, adding that the timing is critical if PNOC wants to get a good price.

A PNOC-EC official told The STAR that the offering is actually still just a plan.

"It is just a proposal. The PNOC and the Department of Finance (DOF) are still studying if the privatization of PNOC-EC will be pursued or not. The timetable would depend on PNOC and DOF," the official said.

PNOC-EC has been listed in the country’s stock exchange since 1976 but it is not traded. Some 99.8 percent of PNOC-EC is owned by PNOC, the remaining shares are held by the public.

PNOC is planning to dispose of its stake in PNOC-EC as part of the overall privatization thrust of the government.

PNOC-EC chairman Horacio Paredes earlier said the planned offering forms part of their agreement with the DOF when the firm borrowed money to fund its take in the Malampaya gas to power project.

PNOC-EC holds a 10-percent stake in the Malampaya project, which is expected to yield $9 billion in government royalties in the next 20 years on top of the firms’ share in the consortium.

Aside from PNOC-EC, other proponents of the Malampaya project are Spex and Texaco which have a stake of 45 percent each.

PNOC is also planning to hire a financial advisor to study this proponent. But it was learned that the government is keen on retaining majority stake in the company.