Oriental Peninsula enters power business

MANILA, Philippines - Publicly-listed Oriental Peninsula Resources Group (ORE) approved yesterday its acquisition of 40 percent of Oriental Energy Power Corp.

In a statement, ORE said its stakeholders have approved the company’s investment in the power generation firm which is consistent with its plan to venture into the power generation business.

Oriental Energy recently signed a service contract with the Department of Energy (DOE) to build an 18-megawatt mini-hydropower plant in Timbaban River, Aklan.

Apart from its DOE-approved service contract, Oriental Energy has secured the nod of Aklan’s Sangguniang Panlalawigan for the project. Operational by 2012, the mini-hydro project will help ease the perennial power shortage in the Panay Island grid.

ORE chairman and president Caroline Tanchay said the company decided to enter the renewable energy sector since it makes good economic sense to go into clean, sustainable energy to help lessen the country’s dependence on fossil fuels.

To pave the way for ORE’s purchase of an equity stake in Oriental Energy, ORE’s shareholders approved the change in the firm’s primary purpose to include power generation and natural resources development.

At the same time, ORE approved an increase in the corporation’s capital stock to P2 billion from P1.5 billion. This will be done through a stock rights offering of 548 million common shares with a par value of P1 per share. Part of the proceeds will be used to purchase the 40-percent stake in Oriental Energy.

Meanwhile, ORE maintained that its subsidiary — Citinickel Mines and Development Corp. — remains the holder of a valid and subsisting mineral production sharing agreement (MPSA) duly approved by the Department of Environment and Natural Resources (DENR).

Citinickel has been locked in a bitter battle with mining operator Platinum Metals Group Corp. (PGMC) whose operating contract was terminated by Citinickel’s predecessor, Olympic Mines and Development Corp., due to alleged environmental violations. The DENR also terminated PGMC’s environmental compliance certificate as a result of the infractions.

The Supreme Court ruled recently that the Palawan Regional Trial Court has jurisdiction to hear the case involving the operating contract dispute between Olympic and PGMC. It also ruled that Citinickel is Olympic’s successor-in-interest.