PNOC mulls new geothermal unit

After divesting its majority stake in its geothermal subsidiary, government-run Philippine National Oil Co. (PNOC) is looking at the possibility of putting up or buying into another geothermal company, a top company official said.

PNOC president Antonio Cailao said they sold the PNOC-Energy Development Corp. to the private sector because they believe that this geothermal arm has already matured into a company whose commercial value is at its apex.

“It is thus a most opportune moment for the government to monetize on this value. To do it at a later time would render the company less valuable especially when other plants get on stream to incrase the supply, thus, deprive the government in actualizing this value,” Cailao said.

Cailao made this statement to explain why they need to sell PNOC-EDC and later on create another geothermal company. The sale of PNOC-EDC, he said, has even surpassed the government’s expectation.

“Equivalent of P9.75 per share, the bid price was more than three times the initial public offering price of P3.20 per share; 30 percent above the reserve price of P7.50 per share,” he said.

The PNOC chief stressed that with a “non-compete clause” in the sale agreement of PNOC-EDC, the government, mainly through the Department of Energy (DOE)/PNOC, can go into geothermal energy business anytime,” he said.

He said PNOC has more than 80 technical persons and scientists who can back up PNOC in going into this business.

“This is not to mention some P17 billion financial resources to get into business,” Cailao said.

Of the P58.5 billion proceeds from the sale of PNOC-EDC to First Gen Corp.-led consortium-Red Vulcan Holdings Corp., PNOC got P11.5 billion while P47 billion went ot the National Government through the Bureau of Treasury (Btr).

According to Cailao, aside from power generation, PNOC wants to harness further the potential of geothermal energy.

“We are looking at using geothermal power for aquaculture,” the PNOC official said.