PNOC-EC sets exploration budget of P5.25B

MANILA, Philippines - PNOC Exploration Corp.(PNOC-EC), the upstream petroleum and coal arm of state-owned Philippine National Oil Co., is looking to spend P5.25 billion this year, covering its petroleum and coal exploration projects as well as two power plants.

In a statement issued yesterday, PNOC-EC said the proposed budget, which is subject to the approval of PNOC, includes a total capital investment of P4.55 billion including contingency, P167.81 million.

PNOC-EC is aiming to become a player in the local downstream sector by putting up infrastructure that will allow it to import, store, and supply refined petroleum products to the domestic market.

 The company is currently studying options for setting up tank farms in North and/or South Luzon that will serve as storage for its own oil inventory and for other players as well. Initially, PNOC-EC plans to lease tanks for imported products and sell these to identified local downstream oil players.

For its coal operations, PNOC-EC has allotted P818 million for the development of the Lumbog coal project which is within its coal operating contract 41 - Malangas coal project located in Zamboanga, Sibugay.

Slated for production in the second quarter next year, the Lumbog coal project is expected to boost PNOC-EC’s current production from its mining operations.

It is also the first of several projects programmed within the next five years for COC 41, aimed at increasing the coal reserve inventory to sustain the fuel requirements of the planned 50 MW power plant in the area.

To comply with the PSE’s minimum public ownership rule, the company, which is 99.79 percent owned by the government, is preparing to undertake a follow-on offering of shares.