PNOC-EC hikes standby facility to P20 billion

MANILA, Philippines - State-owned PNOC Exploration Corp. has jacked up the standby facility that it intends to raise from five banks to P20 billion, a top company official said.

PNOC-EC chairman and CEO Gemiliano Lopez said this facility is 100 percent higher than the original fund that was supposed to be raised by the company to support its capital expenditure program.

Although, the PNOC-EC will not yet draw down from the said facility, there are banks that have submitted proposals to provide the funds for the company.

Among the banks that offered credit facilities are BNP Paribas, P5.208 billion; PNB, P2 billion; Land Bank of the Philippines, P1.85 billion, Standard Chartered Bank, P1.823 billion and HSBC for P1.616 billion.

PNOC-EC has set aside some P5.25 billion for its projects this year of which around P900 million alone will be spent for the expansion of its coal mine in Zamboanga, Sibugay.

According to Lopez, the capital will be used to fund the development of the existing coal mine and double the annual production to 500,000 metric tons of steaming coal.

“This move fulfills the corporate mandate of securing indigenous energy source for the country,” Lopez said.

Lopez said PNOC Exploration’s need for additional funding would depend on how much the company can raise from its follow on offering this year.

The company is also planning to invest for compressed natural gas facility this year.

But the PNOC-EC will need to raise over P2 billion to finance its 50 million diesel importation scheduled to arrive end of May.

PNOC-EC vice president Joseph Omar Castillo, on the other hand, said the company will likely finance the importation through “trade financing by its creditor banks.”

The company has been in the forefront of government’s effort to ensure oil supply in the country.

The National Government has directed PNOC-EC to secure a strategic reserve for diesel and the company is now looking at storage areas in Subic and Quezon.

At present, the company is engaged in petroleum and coal exploration. It is also involved in petroleum trading.