PNOC-EC to pursue coal mine-mouth projects

MANILA, Philippines - PNOC-Exploration Corp., the gas and oil exploration arm of the state-owned Philippine National Oil Co. (PNOC), will actively pursue its coal mine-mouth projects in Mindanao this year.

Joseph Omar Castillo, PNOC-EC vice president, said they would be seeking joint venture partners for these projects.

“We will be putting priority to joint venture selection for our mine-mouth power plants,” he said, when asked what will be the company’s priorities for 2012.

The power plants, he said, would have a capacity of 100 MW each and estimated to cost $200 million each.

He said once completed, these projects, to be located in Zamboanga Sibugay and Isabela, would be first of their kinds in the country.

“(It would be) the first in the country. It will reduce logistics cost of transporting coal. Isabela and Zamboang Sibugay are underserved provinces and the plants will hopefully boost business climate and generate needed employment,” he said.

Aside from the two power plant projects, Castillo said they would also be looking into the construction of compressed natural gas (CNG) daughter stations within Luzon.

He said they would also be pushing for the more exploratory drilling at Service Contract (SC) 63.

“On SC 63, in partnership with Nido, we are choosing a drill prospect in the area target time for drill is third quarter of 2012,” he said.

PNOC-EC chairman Gemiliano Lopez Jr. said the mine-mouth projects are expected to further improve the company’s earning.

He said they would also explore for petroleum reserves in various parts of the country; and start coal production in Zamboanga Sibugay this year.

“In the remaining months of this year and in the years to come, we will intensify our efforts in fulfilling our company’s primary-mandate the exploration of petroleum and coal resources in order to secure a stable and bigger supply of indigenous-based energy,” Lopez said.

The company has proposed budget of P5.25 billion this year. This includes a total capital investment of P4.55 billion, P167.81 million for capital expenditures and P572.70 million for operating expenditures.

The PNOC-EC executive said they may also tap a standby credit facility from numerous banks of about P12 to P20 billion to fund portion of its financing requirements.