SMC set to expand interests in energy sector

Conglomerate San Miguel Corp. has expressed interest in broadening its energy portfolio to include investments in the upstream oil exploration and natural gas industries.

“We are now studying and evaluating the available opportunities in the oil and natural gas sectors,” said San Miguel president Ramon S. Ang on the sidelines of Petron’s recent stockholders’ meeting.

Ang said that the company was intent on participating in the Philippine Energy Contracting Round 4, under which contracts to explore and develop 15 oil and gas areas with good prospects will be auctioned by the Department of Energy.

San Miguel, Ang said, was also interested in joining the bidding for the $1.3-billion, 100-kilometer Batangas-Manila natural gas pipeline, a crucial infrastructure intended to further develop the Philippines’ natural gas industry.

According to Ang, San Miguel’s possible ventures into the upstream oil and natural gas sectors would be done through its subsidiary, San Miguel Energy Corp. (SMEC).

San Miguel’s plans to seriously consider natural gas projects were earlier bared by Kenji Uenishi, president of GE Energy for Asia Pacific.

Uenishi told the Inquirer that he had met with some of the biggest power generation companies, including San Miguel.

GE currently supplies the technology and equipment for such sectors as oil and gas, power generation, renewable energy, heavy duty gas and steam turbines and industrial solutions.

San Miguel’s interest in the upstream oil and natural gas sectors may be due to the fact that the company wants to build a considerable power generation portfolio, consisting mostly of facilities fueled by both coal and liquefied natural gas (LNG).

As early as last year, Ang told the Inquirer that San Miguel had started preparations for a $6-billion capital rollout for coal and LNG facilities that can produce a total of 3,000 megawatts.

The company, Ang had disclosed, was likewise looking at prospective oil and natural gas fields with huge proven reserves.

While he declined to identify which areas San Miguel was eyeing, Ang stressed that he wanted to go for those that contain huge reserves abroad.

The Philippine government has been trying to boost the local natural gas industry as part of its efforts to develop cleaner sources of energy.