Thursday, August 9, 2012

PNOC-EC gets extension for Mindanao coal project


By Neil Jerome C. Morales (The Philippine Star) Updated August 09, 2012 12:00 AM


MANILA, Philippines - State-led Philippine National Oil Co.-Exploration Corp. (PNOC-EC) has secured an 18-year extension for its coal mining project in Zamboanga Sibugay.
PNOC-EC will initially spend P1.696 billion for the exploration, development and production of the mine in the next five years, the company said in a disclosure.
“The Department of Energy (DOE) recently approved PNOC-EC’s request to extend Coal Operating Contract (COC) 41 located in Malangas, Zamboanga Sibugay for another 18 years,” the company said.
The contract was first awarded to PNOC-EC in August 1980. The 18-year extension will expire in August 2030.
“The extension will allow PNOC-EC to fully assess its potential and increase coal production to supply the requirement for the proposed 100-megawatt (MW) coal-fired power plant scheduled to be put up by 2015,” the energy firm said.
In January, PNOC-EC announced its plan to build a coal mine-mouth power plant in Zamboanga Sibugay and another in Isabela.
Each power plant, which will require a joint venture partner, will have a capacity of 100 MW that will require an investment of $200 million each.
PNOC-EC earlier said it wants a minority stake or as much as 49 percent stake in the power plants. Hence, the company bid out yesterday the contract for the transaction adviser that will facilitate the joint venture with a private firm.
In the five-year work program submitted to the DOE, PNOC-EC said it will spend P362.1 million for the mine’s development, P717 million for production, P50 million for exploration and P567.21 million for capital equipment cost from August 2012 to August 2017.
Total investment for the five-year period is P1.696 billion to produce 1.527 million metric tons of coal.
“PNOC-EC is enjoined to strictly comply with the work and financial commitments since it is now an integral part of COC 41 and any deviation thereof shall be subject to the approval of the DOE,” the coal miner said.
PNOC-EC targets to start mining operations in its Lumbog coal property in Zamboanga Sibugay in the fourth quarter this year.
Based in drilling works, recoverable coal resources in the mine is at 2.1 million metric tons.
In May, PNOC-EC appointed Swiss banking giant UBS AG to lead the energy firm’s push sell 218 million new shares and increase its public float.
To date, the state-led firm has a public float of only 0.21 percent or 4.47 million shares held by the public, which is way below the 10-percent requirement of the local bourse.
Profits of PNOC-EC, which has a minority stake in the Malampaya natural gas project in Palawan, are expected to hit P3.022 billion this year.     source

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