MANILA, Philippines - PNOC-Exploration Corp., the oil and gas exploration unit of state-owned Philippine National Oil Co. (PNOC), reported a 10-percent drop in its income to P970.4 million in the first half of 2010 compared to P1.1 billion in the same period in 2009.
The company attributed the decline in earnings to less revenues due to the scheduled maintenance shutdown of the Malampaya natural gas field in which it holds a 10-percent stake.
In a report to the Philippine Stock Exchange (PSE) PNOC-EC also traced the lower income for the first two quarters of the year to increased costs and expenses during the period.
PNOC-EC is 99.78 percent owned by PNOC while the remaining 0.22 percent is listed at the local bourse.
The decrease in income came despite the rise in its revenues for the six-month period. Sales of PNOC-EC jumped 39.1 percent to P4.5 billion in the first half of 2010 from P3.2 billion in the same period last year.
It said the increase in revenues could be attributed to the improved sales of its three subsidiaries.
The company said cost of sales, meanwhile, increased 82.2 percent to P2.9 billion in the first six months of 2010 from P1.6 billion over the same period last year.
The higher costs were brought about by the increase in the volume of coal sold by the company and a rise in fuel and lube sales.
The government recently decided to put on hold the privatization of PNOC-EC as it awaits for the right timing for the process.
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.