PNOC-EC to vie for coal exploration contracts

Positioning itself into becoming a major player in the coal industry, PNOC Exploration Corp. is inclined to bid for contracts to explore and develop highly prospective coal blocks in the country.

PNOC-EC chairman and CEO Gemiliano Lopez Jr. said the company was looking for additional coal blocks for development, and was just awaiting the Department of Energy’s (DoE) announcement for the auction of coal operating contracts.

According to Lopez, PNOC-EC, which is the upstream oil and coal arm of state-run Philippine National Oil Co., has the financial and technical capacity to acquire more coal operating contracts, with a P14-billion standby credit line with several banks and about 60 engineers on board.

The DoE is scheduled to bid out in October coal operating contracts for four to five blocks, as the government fast-tracks the development of this resource to secure national energy supply.

Energy Undersecretary Jose M. Layug Jr. told reporters that preparations were already ongoing for the planned bidding. He said the DoE was expected to be able finalize by September 14 the list of coal blocks to be auctioned off so that the Philippine Energy Contracting Round (PECR) for coal can be launched within the first week of October.

The PECR 4 for coal will follow the successful launch of the PECR 4 for oil and gas on June 30, when contracts to develop 15 prospective petroleum blocks were offered to local and foreign investors for exploration and development.

The DoE earlier identified 12 prospective coal areas that could yield 1.806 billion metric tons.

Data from the DoE show that Luzon holds a total resource potential of 455.5 million MT; Visayas, 766 million MT; and Mindanao, 584.4 million MT.

At present, PNOC-EC holds four operating contracts for high-grade coal prospects in Zamboanga Sibugay, Isabela and Surigao del Sur.

Recently, PNOC-EC said it would spend about P2.2 billion to develop three new prospective, high-grade coal mines within Zamboanga Sibugay. It expects the three new coal mines namely Lumbog, Lower Butong and Sta. Barbara to increase its coal production by some 800,000 metric tons yearly.

Layug said the DoE was planning to bid out four to five coal contracts in this round.