Spex, Billiton eye PNOC-EC's Palawan contract

Shell Philippines Exploration B.V (Spex) and Australia-based mining giant BHP Billiton are likely to bid for the 20 percent stake of PNOC-Exploration Corp. (PNOC-EC) in Service Contract 63 in Northwest Palawan and offshore Sabah.

PNOC-EC president Rafael del Pilar told reporters yesterday that the two firms have shown “strong interests” to join the bidding.

He said they are currently firming up the terms of reference (TOR) for the bidding process. 

Del Pilar said they hope to award the farm-in contract by late December this year or early January 2009. 

Meanwhile, PNOC-EC, the state-run oil and gas exploration firm reported a net income of P2.45 billion in the third quarter, a 65 percent increase from its earnings in the same period last year.

PNOC-EC attributed the higher profit to an increase in revenues from the Malampaya field, which contributed more than half of its reported income, as well as from its coal operations and the Energy Supply Base, the company’s logistics hub.

The income growth also came despite the decision of the company to defer “indefinitely” its privatization.

Del Pilar said the deferment was recommended by their financial advisor amid uncertainties in the market due to the prevailing global financial crisis. 

He said they have not yet firmed up a new timetable for the privatization and is waiting “for the market to recover”.

PNOC-EC’s privatization has been originally scheduled to be undertaken in the latter part of this year. 

“The market is still in the wait-and-see mode.  We have to wait for the market to recover,” Del Pilar said. 

But he said they have been receiving numerous offers from various investors.

 “Aside from San Miguel Corp. which had already announced its intention to bid for PNOC-EC, there are a number of big groups that signified interest,” he said.

PNOC-EC, the oil and gas exploration arm of Philippine National Oil Co. (PNOC), has been very aggressively allowing the private sector to take part in its endeavors.

Yesterday, it signed a contract with Agusan Power and Mineral Corp. (APMC) to develop a coal mine in Siay, Zamboanga Sibugay.

The two-year project will involve a total investment of P150 million.

But the proponents of the project said they would pour in more capital as soon as they prove the feasibility of the project. 

The project involves six blocks at 6,000 hectares and a probable reserves of 45 million tons.   – Donnabelle Gatdula