PNOC-EC to take 15% stake in O&G concessions
Offshore staff
MANILA, The Philippines The Philippine National Oil Co has been given an option to claim up to 10% equity when one or more Filipino companies participates in a local exploration block. The stake increases to 15% with no Filipino participation.
These options were effective immediately with the publication of a Department of Energy (DoE) circular dated Dec. 22, 2006. According to the circular, PNOC's upstream unit, PNOC-Exploration Corp. (PNOC-EC) is allowed to participate as much as it wishes, as it has done in the past.
The circular gives PNOC 30 days to express interest once an exploration block is awarded.
Energy Undersecretary Guillermo R. Balce says the move was to boost PNOC's upstream portfolios. Local investors will also benefit through incentives, including the 7.5% Filipino Participation Incentive Allowance under the country's Oil and Gas Law, Balce says.
The DoE plans to craft the new policy to ensure that new investors are not deterred from investing in the oil and gas blocks recently offered under the Philippine Energy Contracting Round. In the meantime, upstream investors are expected to submit bids by the middle of 2007 for the nine blocks offered under the latest bidding round.
Most of PNOC's upstream portfolios are through the PNOC-EC, which is already widely involved in ongoing exploration in the country, having taken a 20% stake in the Mindoro block (SC 47) being explored by Malaysia's Petronas Carigali Overseas Sdn Bhd, a 28% stake in the Calamian (SC 57) block, and 50% stake each in the West Calamian block (SC 58) and West Balabac block (SC 59).
The company is also 50:50 partners with Nido Petroleum in the East Sabina block (SC 63) and has a 15% interest in Service Contract 43, covering the Regay Gulf prospect, where its partners UK-based Premiere Oil and Singapore-listed Pearl Oil, have planned a $14-million exploration program covering at least one well.
PNOC-EC is also involved in the Malampaya Deep Water Gas to Power Project (SC 38) and the Camago-Malampaya Oil Leg Project.
Industry experts say the decision to award a compulsory 15% stake is in line with Asian national energy policies, where states participate in domestic projects through national oil groups with the option to increase ownership in the case of a commercial discovery followed by oil and gas production.
1/3/2007