DOF, DOE back sale of PNOC’s Malampaya stake

The Department of Finance (DOF) and the Department of Energy (DOE) are agreeable to a proposal to offer to the public the 10-percent stake of the Philippine National Oil Co.-Exploration Co. (PNOC-EC) in the $4.5-billion Malampaya gas project.

"(Finance) Secretary Camacho and I are more strongly inclined to having a public flotation of this equity stake in the future," Energy Secretary Vincent Perez said.

But Perez admitted that he has yet to discuss the idea with the officials of the PNOC-EC, who have a different view on the matter.

PNOC-EC officials earlier said they believe the company should keep its 10-percent stake in the Malampaya project. PNOC president Thelmo Cunanan said they intend to maintain their equity in the multibillion-dollar project, seeing the prospects of the natural gas industry in the Philippines.

Cunanan said they would likely defer any moves on the planned offering due to weak stock market performance. "I think there would be no secondary offering happening this year," Cunanan said, noting the prevailing uncertainties in both local and foreign international financial capital market.

Besides, the PNOC official said they believe that recent developments in the upstream and downstream natural gas industry may prompt them to rethink their plans to sell their shares in the exploration subsidiary.

"We will hold on to it. We believe that our equity in PNOC-EC shares are money in the bag," Cunanan said.

However, Perez said it is also appropriate to allow the public to have a share in the natural gas project.

"We feel strongly that the investing public should have an opportunity to participate in the Malampaya project. One of the ways we could consider is public flotation of the 10-percent stake held by PNOC-EC in the Malampaya consortium," the energy secretary said.

He said there are some options that they are eyeing right now like selling the shares through private placement. "We’ve received some feelers from certain parties who would like to buy this 10-percent stake in Malampaya held by PNOC-EC," he said.

PNOC, the mother firm of PNOC-EC, initially wanted to proceed with the secondary offering for its exploration arm after the Malampaya project goes on-stream early this year. It is believed that PNOC cold fetch a much better price for PNOC-EC shares if the Malampaya is already on stream.

The Malampaya project is expected to yield $9 billion in government royalties in the next 20 years on top of the PNOC-EC’s share in the consortium.

Aside from PNOC-EC, other shareholders of the Malampaya project are Shell Philippines Exploration B.V. (Spex) and Texaco of US owning 45 percent each.

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