PNOC shipping unit eyes sister firms as customers

The PNOC-Shipping and Transport Corp. (PSTC), a subsidiary of state-owned Philippine National Oil Co. (PNOC), is planning to forge an agreement with its sister companies early next year for a possible importation arrangement.

PSTC president Cesar Tapia said they are currently discussing the terms of the planned agreement with the other subsidiaries of PNOC such as the PNOC-Petrochemical Development Corp. (PNOC-EDC) and the PNOC-Energy Development Corp. (PNOC-EDC).

If the deal pushes through, the PPDC and the PNOC-EDC will be an addition to the current list of sister company-clients of the shipping firm, Petron Corp. The PNOC owns about 40 percent of the said oil company.

Aside from Petron, the PSTC services Pilipinas Shell Petroleum Corp., one of the major oil companies in the country.

Tapia said the PSTC could help the PPDC transport the petrochemical by-products of the naphtha cracker plant. PPDC is expected to finalize the deal for the construction of the first cracker plant in the country.

"The other subsidiaries of PNOC are looking for a tanker or a ship that could help them in their distribution needs," Tapia said.

But Tapia said before they could sign up an agreement with its sister firms, they should first finalize the purchase of at least two new shipping vessels.

"We need to buy new ships to conform to the needs of our sister firms," he said, noting that their existing vessels are not only very old but also do not conform to the requirements of their sister companies.

He said they are now in the process of closing a loan agreement with the Development Bank of the Philippine (DBP).

According to Tapia, they are arranging for $6-million to $8-million loan to purchase at least two shipping vessels amounting to $3 million to $4 million each.

He expressed hope that the loan would be finalized early next year. He noted that by next quarter they would start looking for a tanker or a ship to purchase.

With the purchase of new vessels, the PSTC expects its income to increase by 20 to 25 percent in 2002. This year, they projected to post an earning of about P20 million. In 2000, the company made P160 million in earnings.