PNOC, Indon firm ink jt venture

Publicly-listed PNOC-Exploration Corp. (EC) has tied up with an Indonesian coal firm for a possible joint venture on coal-related businesses.

"We have already signed a MOU, (memorandum of understanding) soon with PT Garda Tujuh Buana Coal Mining Corp. last Thursday," EC president Rufino Bomasang told The STAR.

With the signing, Bomasang said both firms will start their due diligence and they expect to come up with the results by middle of this year.

He added that EC, the oil, coal and gas exploration arm of state-owned Philippine National Oil Co. (PNOC), will include in its due diligence the possible use of Indonesian coal from Bunyo Island in the Philippine market.

"We will test the quality of the existing reserves in the Bunyo island in Indonesia. We want to specifically determine whether we can utilize their coal reserves for our local coal market," Bomasang said.

He said the MOU may also allow EC to share its mining expertise with PT Garda and help market coal to the Philippines.

"We will serve as their marketing arm here in the Philippines while we will provide technical assistance in their coal exploration in Indonesia. This is a two-way venture," he said.

According to Bomasang, PT Garda – one of the largest coal firms in Indonesia – can supply as much as 1.7 million tons of coal per year to the Philippines.

The EC official noted that the agreement with PT Garda is aimed at supplementing coal supply in the country and not displace local coal suppliers.

In fact, he said EC will be forging a strategic a alliance with Semirara Coal Mining Corp. for this purpose.

"This will be good for the Philippines since there will be stability of supply at reasonable cost without displacing local coal suppliers," he said.

EC initiated the talks with PT Garda last month during a visit to Indonesia for possible coal supply agreements with Indonesia Coal Mining Association (ICMA).

PT Garda runs a coal mine in Bunyo Island in East Kalimantan in Indonesia, which is twice as large as the Semirara Island in Antique.

Bomasang considered the MOU with PT Garda as timely amid fears of possible shortage of coal in Asia particularly those that are coming from mainland China, where the Philippines get most of its coal requirements.