Who wants to take over Semirara?

Semirara, this sprawling and seemingly enigmatic island of coal, has always been synonymous with the Consunji Group. Only a few remember the 1970s when this natural resource transitioned from a government-led exploration to a little-known company called Vulcan Mining.

Nearly three decades later, or since DMCI Holdings acquired an interest in Semirara in 1997, the Consunji-led Semirara Mining & Power Corp.’s coal operating contract – set to expire next year – will be up for auction in a few months following the Department of Energy’s decision to bid the contract instead of simply renewing it.

Who would be interested in this land of so-called black gold?

The MVP Group’s big boss Manuel V. Pangilinan said it’s worth looking into, given the group’s coal assets, including the 1,200-megawatt Atimonan coal-fired power plant.

Tycoon Ramon Ang said he’s still unsure, when I asked him yesterday if he was interested in bidding.

The Ayala Group, the country’s oldest conglomerate, will definitely not bid, considering its pronouncements five years ago that it would transition away from coal to a lower-carbon portfolio. The Aboitizes also indicated that they’re not interested in bidding.

That leaves EKR the only major power player. But it’s unlikely that ports and casino tycoon Enrique Razon would be interested, given his focus on the cleaner-burning Malampaya natural gas project.

Speaking about his Malampaya bid in 2022, Razon said: “Natural gas is a critical transition fuel and the modern, state-of-the-art infrastructure built to harness this valuable transition fuel attracted us to pursue this deal – all aspects of the project ticks off our environmental, social and governance checklist that will allow us to contribute more to the country’s transition from expensive and volatile coal and imported fuel prices to affordable cleaner and domestic energy resources like natural gas.”

Thus, so far, only Pangilinan and RSA might join the fray.

But could there be some unexpected, little-known dark horse? Or one who may be in it for ulterior motives like laundering billions of ill-gotten flood control funds? Sounds outrageous, I know, but hey, this is the Philippines and nothing is ever so outrageous.

Game changers

This is where the bid parameters that the DOE would set will be crucial.

The price alone won’t be enough. Financial capability, experience in handling massive projects, ability to pay royalties to the government and perhaps a plan to keep the island and its community sustainable, will be the real game changers.

Tycoon Isidro Consunji, of course, has the big edge, considering that his group knows Semirara like the back of its hand. Not only did they turn around the company they acquired from its previous owner decades ago, but they also managed to “clean” the coal to make it attractive to buyers.

Plus, they successfully transformed the once sleepy, backward town of Semirara Island in Antique into the busy and progressive island that it is now.

The DOE surely knows this because its officials have been visiting the island.

But with the upcoming competition, the Consunji Group will have to come up with an even better offer to the government. The stakes are high, so they will definitely up their game.

From what I heard, the DOE was just being extra careful to avoid a court case as what happened to secretary Alfonso Cusi and several DOE officials, who are currently facing graft charges before the Sandiganbayan for the alleged rush sale of Malampaya shares to Duterte crony Dennis Uy.

What does this bidding mean for Semirara investors?

Realistically speaking, there might be a delay in dividends this year from Semirara as the listed company has to first make sure it meets the financial ratios the DOE may require for the bidding.

All eyes will be on this upcoming auction for sure. It will not be as big as the water privatization of the 1990s, but it will be just as exciting.

Aramco wants to expand presence in Phl

Over at the oil industry, I heard that Saudi oil giant Aramco, which made its comeback to the Philippines last year through an investment in Unioil, wants to expand its presence here.

Sources said Aramco wants to invest more in the Philippines, beyond the 25 percent stake it acquired in fuel oil retailer Unioil last year.

Aramco returned to the Philippines after selling its stake in Petron 17 years ago, and now sees the potential to bet bigger on the country, sources said.

One option is to acquire a majority stake in Unioil, although the Co family-owned oil company is not inclined to sell more, my sources added. Another route is to buy another independent oil player.

The question is – who is willing to sell?

Beleaguered oil firm now leasing assets

Speaking of oil companies, one troubled firm is reportedly just leasing some of its assets to other players for some time now because it could no longer pay its suppliers.

To motorists, the signboard at the gas stations looks unchanged – but behind the pumps, another company is running the operations and simply remitting a share of sales.

The oil firm has been facing challenges for some time now, unable to close deals with potential white knights. It has also not been able to pay dividends to shareholders.

In business, even the boldest flights – no matter how strong the wings – eventually face a hard landing.

*      *      *

Email: [email protected]. Follow her on X @eyesgonzales. Column archives at EyesWideOpen on FB.