PNOC unit suffers 26.5% income drop

MANILA, Philippines - Publicly-listed PNOC-Exploration Corp. reported yesterday a 26.5-percent drop in its earnings to P1.08-billion in the first six months of this year, from P1.46 billion in the same period in 2008, an lower revenues.

Based on its report to the Philippine Stock Exchange (PSE), PNOC-EC said revenues for the first semester of the year reached P3.24 billion, a 23.76- percent decrease from P4.25 billion recorded a year ago.

Specifically, revenues from the Malampaya project dropped 18.73 percent to P2.36 billion from P2.91 billion.

The company’s coal revenues also went down 27.77 percent to P846.49 million from P1.17 billion.

Sales from energy supply base (ESB) likewise declined substantially, or by 77.61 percent, to P34.03 million from P151.97 million.

The company said it was able to prevent a further sales drop with the full payment of a Malampaya-related loan at the end of 2008, resulting to a zero financing cost in 2009 and a decrease in operating cost.

The company said the expiration in June 2008 of the Joint Marine Seismic Undertaking in the South China Sea, a tripartite agreement it entered into with state-owned firms of China and Vietnam, likewise helped lessen its operating expenses 28.96 percent from P214.09 million to P152.10 million.

Initially starting out as the Exploration Department of Philippine National Oil Co., in April 1975, PNOC- EC was eventually incorporated as a PNOC subsidiary and registered with the Securities and Exchange Commission on April 20, 1976.

Its shares of stock are 99.78 percent owned by the Philippine government through PNOC, with the remaining 0.22 percent held by public shareholders.

In its early years, PNOC-EC served mainly as a catalyst in petroleum exploration, focusing its activities in frontier onshore areas in Cagayan Valley, Central Luzon and Samar.

In 1994, PNOC-EC’s three-Megawatt San Antonio gas power plant in Echague, Isabela was commissioned, providing electricity to more than 10,000 households. The operation of the plant made PNOC-EC the country’s first producer of indigenous natural gas.

Encouraged by its successes, PNOC-EC started to take bold moves in the 1990s by expanding its operations in the offshore areas of Northern Palawan, Ragay Gulf and offshore Mindoro .

During this period, the company became either a lead operator or a partner in petroleum exploration joint ventures with local and foreign companies.