Yearend sale of PNOC's exploration unit not final

MANILA, Philippines - The state-run Philippine National Oil Co. (PNOC) remains undecided on the sale this year of PNOC – Exploration Corp., its oil, gas and renewable energy unit, a ranking PNOC official said.

The official, who requested anonymity, said the company is still assessing the market.

“We are still studying it very carefully. It seems like prices at the market are not good,” he said.

But the official admitted it is crucial that they decide on the matter soon as the Department of Finance (DOF) has lined up PNOC-EC for privatization in the last quarter of the year.

“Nothing on our side yet,” he said, when asked if the sale process is moving as scheduled.

PNOC-EC is supposed to be privatized this year but its board has cautioned against the sale of the government’s 40-percent holdings.

“As far as PNOC-EC is concerned, its privatization at this time is untimely due to the depressed stock market prices. Any forced privatization may not be advantageous to the corporation and the goverment as it may lead to a fire sale. So, the PNOC-EC board thinks it is best to wait for the economy to improve,” the company said.

PNOC-EC holds a 10-percent stake in the $4.5-billion Malampaya gas to power project. It also holds interests in various service contracts exploring for oil and gas reserves.

Initially starting out as the Exploration Department of PNOC in April 1975, PNOC- EC was eventually incorporated as a subsidiary on April 1976.

PNOC-EC’s 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.     – Donnabelle Gatdula