Government eyes up to P40B from sale of stake in PNOC-EC

The government could raise as much as P30 to P40 billion from the sale of its stake in PNOC-Exploration Corp. (PNOC-EC) if market conditions are good, a ranking official said.

This is significantly above the government’s earlier estimate of P10 to P16 billion from the sale of PNOC-EC, the official said.

As such, the official said the sale of PNOC-EC might be delayed further as the government hopes to sell it when the environment improves so it could get a good price.

“The plan is to sell it when the market stabilizes and it recovers,” the government official said.

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.  PNOC-EC, meanwhile, monitors and administers the country’s oil and power supply.

The government had planned to sell PNOC-EC in November 2008 and book the revenues immediately but officials said they are still waiting for better market conditions and for some administrative issues to be ironed out.

Finance Secretary Margarito Teves earlier said PNOC-EC, Food Terminals Inc. and the government’s real estate property in Fujimi, Japan would be put on the auction block in early 2009.

“PNOC-EC, FTI, Fujimi and some other property assets will be put on sale in 2009,” Teves had said.

However, officials said that with the ongoing global financial turmoil, the sale of PNOC-EC may be delayed anew so the government could get a good price.

“The reason is that the market has pummeled and is dysfunctional,” a government source said.

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.