The board of state-run PNOC Exploration Corp. approved an operating budget of P10.593 billion for 2020 to finance exploration and production projects and other capital expenditures.
PNOC-EC, the oil and gas arm of Philippine National Oil Co., is allocating a firm budget of P2.896 billion which includes expenses related to the Malampaya gas project (P766.31 million), petroleum exploration (P853.43 million), coal exploration and development (P733.84 million), capex of P64.7 million and operating expenses of P477.86 million.
The company said it would also allot a contingent budget of P7.696 billion for an undisclosed exploration and production project.
The board approved PNOC-EC’s budget on Dec. 11, 2019 during its regular meeting.
It is not clear if the approved budget would cover PNOC-EC’s plan to acquire an additional stake in the Malampaya gas project after it exercised its right of first refusal on the sale of Chevron Malampaya LLC’s 45-percent stake to Udenna Corp.
“PNOC-EC exercised its right. We are getting that...We exercised the right because we feel that the acquisition price is advantageous… It’s advantageous for EC to invest in. It’s an opportunity for EC to invest, [as] the returns are good,” Energy Secretary Alfonso Cusi said earlier.
Udenna, controlled by businessman Dennis Uy, signed a sale and purchase agreement to acquire the entire shareholdings of Chevron Malampaya LLC, a wholly-owned subsidiary of Chevron Philippines Ltd. in October last year.
PNOC-EC, as a member of the Malampaya Consortium, has the right to match the offer of Udenna for Chevron’s stake. It holds a 10-percent stake in the Malampaya Consortium, while Shell Philippines Exploration B.V. owns a 45-percent stake and serves as the operator of the $4.5-billion project in northwest Palawan.
PNOC-EC posted a net income of P1.371 billion in 2018, up 23.6 percent from P1.109 billion in 2017. It derives the bulk of its income from the Malampaya gas field.