PPP conversations No. 11 with PNOC President Lista

One of the government agencies undergoing transformation in order to be more relevant and truly developmental is the Philippine National Oil Co. (PNOC). From a holding or “passive” company, it is now reengineering itself to be an operating or “active” company.

Recognizing its limitations while capitalizing on its resources and assets and furthering the programs of the Department of Energy (DOE), the Philippine National Oil Co. (PNOC) is poised to enter into public-private partnerships (PPPs) for liquefied natural gas (LNG) and real-estate development.

PPP lead chats with PNOC President Reuben S. Lista to know where PNOC is headed.

• What is your concept of PPP?

PPP is a tool that harnesses the strengths of the private sector in attaining developmental objectives of the government. It capitalizes on the expertise of the private sector as it lessens the financial exposure of PNOC while limiting its business risks but provides a way for the private sector to recoup its investment.

• What makes PPP a viable and preferred development strategy for PNOC?

The PPP aids in accelerating the learning and development of expertise on the technical and operations aspect of the PPP, which PNOC needs as it transitions from a purely holding company to an operating company. PNOC, as a government-owned and controlled corporation (GOCC), acts as a catalyst for pioneering projects that will pave the way toward the development of the natural gas/LNG industry in the Philippines, consistent with the DOE’s nine-point agenda, policy pronouncements and other rules and regulations.

• Is PNOC ready for PPP? Why? What projects are you looking at?

PNOC has received several interests from the private sector, both for the development of the LNG industry and of its valuable real-estate asset in a prime location at Bonifacio Global City. PNOC also needs to maximize the use of its other real-estate assets, such as those in Bataan and Batangas. PNOC recognizes that PPP projects would require business-development skills that are necessarily interdisciplinary. PNOC’s readiness is in its firm commitment to realize these PPP projects within the term of this administration.

• What are the challenges and risks of PPPs by PNOC?

Structuring its PPP projects is one of the major challenges faced by PNOC. Doing the right thing right from the start will prevent costly delays in attaining PNOC’s objectives. As PNOC is still transitioning to become an operating company and its reorganization plan still subject for approval by the Governance Commission for GOCCs, the lack of in-house technical expertise is both a challenge and a risk. When the PPP projects of PNOC are already operational, its organizational structure should also be ready by then to provide the required personnel in engineering, maintenance and operations, finance, economics, etc..

• What is your message to the public?

The development of the LNG industry in the Philippines toward becoming an LNG hub is PNOC’s vision. “We intend to attain this in tandem with the monetization of our banked gas in order that we will not have to put up any loan. We will build the PNOC Energy Center to house all energy-related agencies and companies, and we will enter into a business-partnership venture in order to have a continuing income for PNOC/DOE, and offer a new image for our country.”