Gov't to consider all options in sale of PNOC-EC stake

The government will consider all possible options for the sale of its 40-percent stake in PNOC-Exploration Corp. (PNOC-EC) which is to be sold in November, its financial adviser yesterday said.

Citibank Philippines country officer Sanjiv Vohra said the mode of sale will depend on what the government wants to do.

“We are looking at the different options. Everything is on the table,” he said, adding that they will choose the option that would generate the best price for the asset.

Finance Secretary Margarito Teves said the government hopes to earn P16 billion from the sale of the PNOC-EC stake.

PNOC-EC is the upstream oil and gas subsidiary of state-owned Philippine National Oil Co. It is also into coal development, production and trading. The government is targeting to sell the 40 percent stake and book the revenues this year.

In 2007, PNOC-EC registered a 32-percent drop in net income to P834.7 million, due mainly to lower revenues from the Malampaya deep water gas-to-power project and higher operating expenses.

Meanwhile, Teves said the government is on track with its plan to sell its remaining 40 percent stake in Petron Corp., the country’s largest oil refiner, before the end of the year.

Teves said the government is eyeing to sell Petron for P25 billion to P26 billion.

But while the government plans to sell both PNOC-EC and Petron this year, Teves said it would not hesitate to call off the sale if the uncertainty in the US affects the prices of the two assets.

US insurer AIG is facing liquidity problems while giant investment banker Lehman Brothers has filed for bankruptcy. Similarly, Merril Lynch & Co. agreed to be taken over by the Bank of America, due to financial problems.

The Finance department hopes to raise P30 billion from privatization for 2008 or one third of the P90.6 billion generated last year. The P30 billion includes expected revenues from the sale of the Food Terminals Inc.

It also includes the P8.9 billion which the government generated from the sale of its stake in power distributor Manila Electric Co. early this year.

The government has been stepping up efforts to boost state coffers but the privatization of state-owned assets has become the major source of revenues amid shortfalls in tax collections.