A pending legislative measure is seeking to refocus the investment mandate of state-run Philippine National Oil Company (PNOC) into exploration and production (E&P) ventures in the oil and gas sector, and for it to transform itself as a global champion in that industry similar to the achievements of many of its peers all over the world.
Under Senate Bill 1992 that was filed recently, it is envisioned that PNOC must metamorphose on its role in the energy sector and for it to triumph as a national oil company (NOC) similar to the stature of international counterparts like Petronas of Malaysia; Pertamina of Indonesia, PetroVietnam, PTT of Thailand, China National Offshore Oil Corporation, Petrobras of Brazil as well as Saudi Aramco, which is currently the world’s biggest oil producer.
According to Senator Sherwin T. Gatchalian, principal author of the bill proposing amendments to the PNOC Charter, the state-run firm had been a successful game-changer of industry developments in the past – primarily in the geothermal sector.
Nevertheless, he noted that such scale of success had been aloof on PNOC’s other technology deployments as well as the investment experiments it had done on alternative fuels and even renewable energy (RE) ventures.
Instead, he noted that PNOC just thinly dispersed its resources and capabilities — that in the end, the company wasn’t able to emerge as a champion in the investment areas it had engaged itself into.
For that reason, the lawmaker emphasized the need to recalibrate the investment activities of the state-run firm, primarily in upstream oil and gas exploration because that is a future that the Philippines would need to succeed on if it has to achieve its energy independence and energy security goals.
“My view on the energy transition, we will need natural gas and we have to explore every possible area here in our country to find our own source of natural gas,” Gatchalian stressed.
He stated that in the country’s quest for its next commercial oil and gas fields, it is PNOC that is seen in the best position to lead the way – even in partnering with deep-pocketed multinational investors that will aid the country in its E&P investment prospects.
“PNOC can be used as a vehicle to explore our own resources…we have to make sure that it is focused on that objective of looking for oil and gas, because the government has this catalyst mandate or role in developing an industry,” the lawmaker explained.
Other investment areas in the energy sector already have the private sector players reigning, hence, as a state-owned company hurdled by bureaucratic processes, PNOC shall already opt out from those sectors because it’s competitive advantage may no longer thrive efficiently.
But in the upstream petroleum sector, Gatchalian indicated that there’s still a major space that PNOC can occupy, especially so since the country’s biggest commercial gas field is already nearing the end of its productive life cycle – thus, a replacement-discovery must be keenly pushed in the Philippine energy transition paradigm.