PNOC-EC expects lower profits this year

MANILA, Philippines -  State-led Philippine National Oil Co.-Exploration Corp. (PNOC-EC) expects its profits to slightly fall this year due to higher operating expenses.

The bulk of this year’s earnings will still come from the natural gas project in Palawan while the firm looks at new exploration projects, according to PNOC-EC documents.

Profits of PNOC-EC are expected to hit P3.022 billion this year, down by 0.17 percent from P3.027 billion last year but still higher than the P2.476 billion recorded in 2010, the energy firm said.

Revenues are expected to grow by roughly nine percent to P10.92 billion from P10.05 billion but it would be offset by a 20-percent surge in cost of sales to P6 billion.

Furthermore, general and administrative expenses are seen to jump by a third to P648.17 million from P481.74 million last year, PNOC-EC said.

PNOC-EC chairman and president Gemiliano Lopez Jr. said the income projection will be reached barring unforeseen events like accidents in the Malampaya natural gas project and other operational problems.

The bulk of the projected profits or P2.68 billion will come from the Malampaya natural gas project.

Lopez said 40 percent of the power supply in Luzon comes from the Malampaya gas-to-power project.

PNOC-EC said nine percent of the earnings or P254.54 million will come from coal trading, eight percent or P245.59 million from mine operations and the rest from oil trading, energy supply base and exploration projects.

Lopez said PNOC-EC is looking at a minimum of three prospects for more oil exploration work.

Such ventures will be conducted with a partner that has the technical capacity to implement the project, Lopez said.

Asked if PNOC-EC wants to pursue oil exploration projects abroad, Lopez said: “We are in the process of studying our financial position. We will decide within the year if the money is enough to invest outside the country.”

The listed firm hiked its capital expenditures by nearly a tenth to P5.5 billion this year, of which P3.805 billion will be the new investment budget and P1.678 billion will come from unused funds last year. PNOC-EC has less than one percent public float in the local bourse.