PNOC taps Citibank for refinancing of $130-M loan

The state-owned Philippine National Oil Co. (PNOC) has chosen Citibank NA as the financial advisor for the refinancing of its $130-million loan package to pay its maturing short-term syndicated loan, Energy Secretary Jose Isidro Camacho said over the weekend.

"Citibank NA will complete the facility," Camacho said, adding that Citibank’s offer was chosen over Lehman Brothers, which submitted a similar proposal.

Last week, PNOC chairman Sergio Apostol said a bridge loan from Citibank becomes due on March 26.

PNOC used the money last year to acquire a 10-percent interest in the Malampaya offshore natural gas project operated by Shell Philippines Exploration BV (Spex).

Based on their previous proposal, Lehman Brothers was willing to provide a three-year, $200 million loan while Citibank NA offered $100 million.

Early last year, PNOC secured a $130 million loan from some commercial banks led by Citibank to help finance its 10 percent farm-in stake in the $2.5 billion Camago-Malampaya natural gas project in offshore northwest of Palawan.

PNOC’s total investments in the Malampaya project amount to $160 million. The remaining $30 million was raised by PNOC through internally generated funds.

The company’s equity in the Malampaya gas project was done through its subsidiary PNOC-Exploration Corp., Spex and Texaco of the US have a majority stake in the project.

The Malampaya project is the country’s largest infrastructure development capable of producing at least 2.6 trillion cubic feet of natural gas starting the second half of this year. The reserves are enough to run three combined-cycle gas turbine power plants in Luzon. – Donnabelle Gatdula