Senate wants Philippine National Oil Co. to focus on oil, gas

MANILA, Philippines — The Senate Committee on Energy wants to streamline the operations of Philippine National Oil Co. (PNOC) and its subsidiaries to allow the state-run firm to solely focus on oil and gas exploration.

With the streamlining of operations, Sen. Sherwin Gatchalian said PNOC could focus on securing the growing energy needs of the country.

“For instance, PNOC-Alternative Fuels Corp. (AFC) looked into the development of jatropha as an alternative source of fuel after the passage of the Biofuels Law in 2006.

About P1 billion had been allotted for the company to develop the feedstock in 2009. However, the development of jatropha was abandoned in 2011 to look for other alternative sources of fuel.

The committee, which Gatchalian chairs, is currently working on a bill that will be filed once Congress resumes.

“This is something that we learned when we visited Japan. We’ll file it as a law,” Gatchalian said.

Energy Secretary Alfonso Cusi earlier said he wanted PNOC to become like Petronas, Malaysia’s government owned oil and gas company which is ranked among Fortune Global 500’s largest corporations in the world.

While PNOC has the money at its disposal, the state-run company finds it difficult to pursue projects since it has to seek concurrence for its budgetary requirements from Congress.

However, Gatchalian said the proposed law would retain the rule of seeking concurrence for its spending.

“We will tighten the power of Congress over this new entity that we’re thinking,” he said.

In 2017, PNOC’s budget request was deferred because it was asking for funds for a proposed liquefied natural gas (LNG) integrated facility without conducting a feasibility study first.

The DOE had tasked PNOC to develop an integrated LNG hub with storage, liquefaction, regassification and distribution facility, as well as a reserve initial power plant capacity of 200 megawatts (MW).

Last month, the state-run firm signed a memorandum of understanding (MOU) with Phoenix Petroleum Philippines Inc. and CNOOC Gas and Power Group Co. Ltd. to explore and discuss business opportunities and cooperation in Tanglawan Philippine LNG Inc.

The addition of PNOC in the discussions will provide a strategic alliance in further developing the LNG project, with the government-run corporation’s involvement in the areas of pipeline infrastructure and franchise, banked gas, equity, and other marketing opportunities.

Last December, the Department of Energy issued a notice to proceed to Tanglawan Philippine LNG to build an LNG terminal in Batangas.

Tanglawan intends to break ground within the year for the regasification and receiving terminal with a capacity of 2.2 metric tons per annum, with commercial operations targeted to start by 2023.