PNOC shelves IPO plans

State-owned Philippine National Oil Co. (PNOC) is putting off plans to undertake an initial public offering (IPO), the company’s top executive said yesterday.

“The management, under my watch, has decided not to undertake the IPO, PNOC president Antonio Cailao said.

Cailao did not elaborate on the postponement of the IPO plans but hinted that “as commander of a ship, PNOC should remain in government’s hands while its subsidiaries are undergoing privatization.”

At the same time, Cailao said they are also contemplating on deferring the privatization of PNOC-Exploration Corp. shares to the second quarter of 2008.

He said it would be logical for government to bid out the Malampaya oil rim first.

PNOC-EC owns a 10-percent stake in the $4.5-billion Malampaya deep water gas-to-power project. The development of an oil rim underneath the gas project will be bid out by the government in the first quarter of 2008.

“It makes sense if we delay the sale of PNOC-EC after March of 2008 or within the second half of next year and wait for the outcome of the bidding of the oil rim development,” Cailao said.

He said this way, the government will be able to come up with a “price booster” for the PNOC-EC sale.

Besides, he said the government only wants to sell PNOC-EC to bridge the budget gap.

“There is no rush now to sell PNOC-EC since the government will be able to meet its budget target,” he said.

While it dismissed altogether the idea of a shares offering and postponing the sale of PNOC-EC, Cailao said the company will start fueling up its operations by spending up to P1.5 billion for its capital expenditure next year.

Cailao said bulk of the capex will go to oil and gas exploration while the remaining P500 million will be allotted for renewable energy development projects.

According to the PNOC chief, the entire budget for 2008 will be internally-generated.

As of end-September 2007, PNOC reported a consolidated net income of P3.02 billion, from only P1.15 billion in the same period last year. About P1.3 billion of the profit was accounted for the parent firm while its subsidiaries contributed to the huge improvement in earnings.

Some P1.2 billion came from PNOC-EC; P14 million from PNOC-Shipping and Transport  Corp.; and P337 million from PNOC-Development and Management Corp.

The only subsidiary that recorded losses for the period was PNOC-Alternative Fuels Corp. with a P56-million loss.