PNOC shipping arm defers sale of vessels till after 2006

PNOC-Shipping and Transport Corp. (PSTC), the shipping arm of the state-run Philippine National Oil Co. (PNOC), has put off plans to sell its vessels until after 2006.

PNOC president Thelmo Cunanan said based on their assessment, the market is not that good thus the sale of PSTC’s assets would probably fail to fetch a good price.

"It is a great disadvantage to the government if we are to privatize PSTC now. We have to enhance the value of the assets first so that there would be interested parties. Otherwise, these assets will not be of any value to the government," Cunanan said.

PSTC is engaged in the business of shipping, tankering, lighterage, barging, towing, transport, and shipment of goods, chattels, petroleum and other products, marine, and maritime commerce in general.

It presently has four tankers, a tugboat and one chartered-in tanker with capacities ranging from 14,000 to 48,000 barrels. It recently acquired a P240-million tanker to transport fuel for Petron, another PNOC subsidiary, from Luzon to Mindanao.

"We are waiting for a change in government policy. The mandate for all of us is to privatize but nobody will be interested to buy old vessels. Younger vessels will be more attractive. If we offer the company for sale now privatization will fail because the buyer will probably give a low offer for our old vessels. Our target timetable for privatization is after 2006,"PSTC president Cesar Tapia said.

The four tankers are Antonio Luna, Andres Bonifacio, Gen. Miguel Malvar, and the Graciano Lopez-Jaena.

"The only asset we can offer right now is Antonio Luna, which we just bought late last year. The other vessels are so old," Tapia added.

PSTC is expected to post a net profit of P35 million this year.

"We can generate P30 million in net profit for this year. But we even foresee making about P35 million in net profit because the Luna vessel is seen to earn better on its first 12 months," Tapia said.

PSTC is expected to complete the payment for the tanker four years from now. "We bought the Luna tanker through a loan and we are paying P6 million a month," he said.