PNOC-EC earmarking P5.5B for exploration activities in ’12

PNOC Exploration Corp., the upstream oil and coal arm of state-run Philippine National Oil Co., plans to earmark P5.5 billion for its proposed investments in exploration activities this year.

In a briefing Tuesday, PNOC EC chair and CEO Gemiliano Lopez Jr. said the company was seeking its parent firm’s approval for a proposed investment budget of P3.81 billion for 2012 and the use this year of P1.68 billion in unused budget last year.

PNOC EC plans to spend P1.51 billion for Service Contract 38 or the Malampaya gas field. The amount will be used for the programmed spending of the Malampaya consortium this year.

Petroleum (oil and gas) exploration activities in the other areas will require P1.47 billion, of which P897 million will be used for the acquisition of new blocks in the country and overseas. It was stressed, however, that the acquisition of new overseas blocks would be hinged on the financial viability and technical evaluation of the prospects.

Of the total P5.5 billion budget, P358 million will be allocated for well planning, exploration drilling and post well evaluation in SC 37 or the Cagayan basin. Another P202 million will be spent for seismic acquisition, processing and interpretation both in SC 47 in offshore Mindoro and SC 57 or the Calamian block.

PNOC EC also holds interests in several other service contracts, including SC 43 (Ragay Gulf), SC 58 (West Calamian), SC 59 (West Balabac) and SC 63 (East Sabina).

Coal exploration activities will need a total of P551.9 million, the bulk of which will be used to fund the exploration and initial development activities under coal operating contract (COC) 41, covering the Lumbog area. This area was estimated to contain a mineable coal reserve of at least 1.4 million tons.

A contingent budget of P66.43 million was earmarked primarily for the exploration and due diligence activities in line with efforts to acquire new coal blocks both in the country and abroad.

Lopez further revealed that the investment budget for 2012 also included an allocation of P279.28 million for various development projects, such as COC 122 or the Isabela coal mine-mouth power plant; COC 41 Malangas coal mine-mouth power plant, and the construction of compressed natural gas (CNG) stations.

PNOC EC is looking to complete the take over of the CNG mother and daughter stations in Batangas and Laguna from  the current owner, Shell Companies in the Philippines.