PNOC-EC on track with Zamboanga Sibugay power project

MANILA, Philippines - State-led Philippine National Oil Co.-Exploration Corp. (PNOC-EC) is on track to starting mining operations in its coal property in Zamboanga Sibugay.

PNOC-EC chairman and president Gemiliano Lopez, Jr. said commercial operations of the Lumbog coal project would start in the fourth quarter this year.

“On time [for operations] but not good quality for the first five weeks, it is inferior quality,” Lopez said.

The coal project is within its coal operating contract (COC) 41-Malangas coal project located in Zamboanga Sibugay.

But Lopez said the higher quality coal would be produced after the layer of inferior quality coal is exhausted.

PNOC-EC allotted P818 million for the development of the Lumbog coal project, which is south of the integrated little Baguio mine.

Based on drilling works, recoverable coal resources in the mine is at 2.1 million metric tons.

PNOC-EC has several projects programmed for COC 41.

PNOC-EC targets increasing its coal reserve inventory to sustain the fuel requirements of a planned 100-megawatt power plant in the area.

For the lower Butong area, PNOC-EC said it has completed the drilling of 12 in-fill holes last month.

“The results of the drilling confirmed the presence of coal, which can be produced commercially,” PNOC-EC said.

To date, PNOC-EC is operating two mines in the Zamboanga Sibugay area.

PNOC-EC said the positive drilling result in lower Butong assures the supply for the planned power plant.

“This should contribute to addressing Mindanao’s current and long-term power needs,” Lopez said.

Meanwhile, the Malangas coal project that is also part of COC 41 recorded 2.06 million man-hours of worked without lost time from accidents, PNOC-EC said.

Profits of PNOC-EC are expected to hit P3.022 billion this year, down by 0.17 percent from P3.027 billion last year, but still higher than the P2.476 billion recorded in 2010.

It operates the Malampaya natural gas project in Palawan.

The listed firm hiked its capital expenditures by nearly a tenth to P5.5 billion this year, of which P3.805 billion will be the new investment budget and P1.678 billion will come from unused funds last year.

PNOC-EC has less than one percent public float in the local bourse.