PNOC-EC operations adversely affected by ‘leadership crisis’

The operations of state-owned PNOC-Exploration Corp. is reportedly being hampered by a "leadership crisis" as the company’s board and employees recently expressed a "no confidence vote" for PNOC-EC president Eduardo Mañalac.

Company sources said the PNOC-EC board, in a planning session in Cebu, has allegedly not been able to come up with any resolution or decision from the agenda due to various disagreements with Mañalac.

"It appears that PNOC-EC is ‘paralyzed’ and the entire operation of the company is in imbroglio," the sources said.

Declining to confirm nor deny the issue, Energy Secretary Raphael P.M. Lotilla said "it (issue) has been there since a month ago." He, however, declined to say if he would investigate whether such issue really exists in the PNOC-EC organization.

In a letter written by concerned officials and employees of the Philippine National Oil Co. (PNOC) family, they said "what PNOC needs now is a decent, morally upright and honest manager".

"What PNOC need is a man of integrity and credibility, who does not say one thing and does another; a man who practices transparency thus avoid this kind of CMOL controversy," they said.

They added that "what PNOC needs is an official who will attract investments and not to bring PNOC to various court and Ombudsman cases and negative media releases, thus damaging seriously the corporate image of PNOC."

In an earlier interview, Mañalac denied allegations that he favored the proposal submitted by Malaysia’s Mitra Energy on the Camago-Malampaya oil leg (MOL) since some officials of the oil exploration firm were his former colleagues in Conoco Philips and China National Oil where he used to work as an executive.

"That is not true. We have implemented a good process and properly selected the right company," he said.

Based on the proposal submitted by the Mitra group to PNOC, production of oil in CMOL will commence before the end of 2007. Mitra Energy estimated a total of 41 million barrels of oil could be extracted from the reservoir for a period of four years with a total project cost estimated at $684 million.

But sources claimed that Mitra Energy has very limited net worth as of December 2005 of only a million dollar.

President Arroyo issued last month Executive Order 556 which effectively revoked Mitra Energy’s contract, saying that "there shall be no farm in or farm-out contracts awarded by any government agency, including PNOC, including contract for the exploration development, and production of crude oil from Camago-Malampaya reservoir."

With the Malacañang decision, PNOC will have to bid out the oil rim project.

Mañalac said they recognized the valid concern of President Arroyo in issuing such order. "We support President Arroyo’s move. The President only wants to make sure that future partners of government agencies, particularly PNOC, will be legitimate and has the right financial strength," he said.

It would be recalled that when PNOC started discussions with Mitra Energy, local conglomerate Burgundy Global Exploration Corp. requested for the Office of Solicitor General’s ruling and opinion to uphold the Constitutional mandate regarding the granting of rights to Filipino when it comes to national patrimony.