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STATE-RUN Philippine National Oil Co.-Exploration Corp.
(PNOC-EC) is hell-bent on developing the Camago-
Malampaya oil leg (CMOL) in a bid to boost efforts to
lower oil and power rates.
“We [PNOC-EC
board] agreed to help the government to soften the
impact of high world oil prices on local petroleum
products by moving forward with the development of the
CMOL in the next two years,” Jacinto Paras, PNOC-EC
chairman, told reporters.
The
newly appointed PNOC-EC official bared plans to enter
soon into an agreement with contractors to kick off the
development of the CMOL, which is estimated to contain
around 40 million barrels of oil.
Paras
said certain terms will allow PNOC-EC to enter into a
joint venture with contractors, but it would have to
pass the scrutiny of the Department of Energy (DOE). The
DOE’s go-ahead, according to Paras, is needed as there
are terms whereby the contractor PNOC-EC taps or
partners with will be allowed to start the mobilization.
Paras said the PNOC-EC board remains optimistic of
extracting oil from the CMOL by 2010. Under the new
terms of reference, according to Paras, the DOE makes
the final ruling.
The
development of the CMOL was stalled after Burgundy
Exploration sued to bar PNOC-EC from awarding the CMOL
project to Malaysia-based Mitra Energy Ltd., and
required it to award the same project to Burgundy—for
being, as it claimed, the most qualified Filipino
corporation pursuant to the “Filipino first” policy of
the Constitution.
Mitra
Energy was supposed to be PNOC-EC’s partner in
developing the oil rim, but the agreement between them
was nullified by the issuance of Executive Order (EO)
556, which amended EO 473, and required that “the
exploration, development and production of crude oil
from the Camago-Malampaya reservoir . . . be done
through bidding.”
For
every year of delay in harvesting the oil from the CMOL—a
highly technical and sensitive operation that, in the
hands of inexperienced groups, could damage the existing
lucrative natural-gas area—PNOC estimated a diminution
of 7 million to 8 million barrels of oil a year in
ultimate recovery.
In a
related development, Paras said they decided to suspend
any decision on whether or not to extend the tripartite
agreement with China and Vietnam under the Joint Marine
Seismic Undertaking, which is expected to expire at
month’s end. “With the controversies that hound it, we
decided not to move forward with it. We will just wait
for the decision of the DOE and the national
government,” he said.
Paras
also said PNOC-EC will also push through with its
planned secondary offering this year, “once we are
certain as to our privatization, probably within the
year.” Paras said PNOC-EC tapped Citigroup as its
financial advisor for the privatization program. To
date, less than 1 percent of the company’s shares are
actually listed at the local bourse.
Rafael
del Pilar, PNOC-EC president and chief executive, said
they will be busy this year after setting aside a
capital expenditure of around P2.4 billion for various
projects.
“This
year, PNOC-EC has allocated P662.7 million to be
invested in oil and gas exploration development; P111.28
million for natural gas development; P842.04 million for
coal projects; and another P787.33 million is also
programmed for the Malampaya gas project,” del Pilar
said.
Incorporated in 1976, PNOC-EC’s primary purpose is to
explore, exploit and develop oil, gas, and other energy
resources. It can also purchase or otherwise acquire,
operate and maintain all kinds of plants, warehouses,
terminals, docks, piers, wharves and other water works
facilities. |
