PNOC unit sets public offer

The PNOC-Exploration Corp. (PNOC-EC), the oil and gas development arm of the state-run Philippine National Oil Co., will likely proceed with its planned public offering in the first quarter of 2003.

"Our financial advisor (ING Barings) has suggested that we postpone the initial public offering (IPO) to early next year," PNOC vice president and spokesman for the PNOC-EC privatization Alfredo Parungao said.

Parungao said PNOC-EC would continue to assess the equities market to determine if it would be ready to push through with the privatization of the company in the first three months of next year. "We have to study the market very carefully," he said.

PNOC-EC was supposed to offer its shares to the public through an initial public offering or a strategic sale in the last quarter of 2002. But due to the weak market, the company decided to suspend the plan following the advice of its financial advisor.

In preparation for the public offering, PNOC-EC has formed a new subsidiary called PNOC Malampaya Production Corp. (PNOC-MPC) to handle the 10-percent stake of the government in the $4.5-billion Malampaya Deep Water Gas to Power project in November 2002.

The creation of PNOC-MPC will pave the way for the planned initial public offering (IPO) of 49 percent of the 10-percent share of PNOC-EC in the Malampaya consortium.

"The assignment of PNOC-EC’s 10 percent participating interest in Service Contract No. 38, its title, interest and obligations under other related contracts, and all or a potion of its associated-debt to its wholly-owned PNOC-MPC," EC corporate secretary Elpidio Gamboa Jr. said in a disclosure to the Philippine Stock Exchange.

Some $175 million worth of debts of PNOC-EC related to the Malampaya share will also be transferred to PNOC-MPC.

Earlier, the National Government has expressed its willingness to privatize the 10 percent stake in Malampaya to bridge the gap in its budget deficit which is expected to hit more than P200 billion this year.

The major proponents of the Malampaya exploration project are Shell Philippines Exploration B.V. with 40 percent share and Chevron Texaco of US, also 40 percent.