Successfully Meeting Challenges: Our Report to the Stockholders
Walking Tall on the Daang Matuwid
Pres Benigno S Aquino III has stated time and again that the Daang Matuwid is the guiding principle for his Administration. Graft and corruption has been a long-festering bane on the country, and Pres Aquino has made it both his personal and official mission to eradicate both. Following the lead of the President and the Daang Matuwid, PNOC Exploration Corporation continues to undertake tough measures in order to ensure that all company operations are above board, and that the people's money, and more so the people's trust, in the company remain strong.
Under the current PNOC EC management, the company has undertaken innovative measures in order to strengthen the fiscal position of the company such as reforming the procurement process through a unique BAC system in use only in PNOC EC. These and other such fiscal and organizational reform measures ensure that all company funds and resources are used judiciously and all transactions are transparent and above board. All of this has led to a stronger PNOC EC that has successfully weathered the toughest challenges.
In the past year, the world was wracked with the continuing effects of an international economic crisis, a crisis so deep and widespread even the institutions and nations that were supposed to be "too big to fail" faltered under its crushing weight. Even the Philippines was not spared, having to contend with the ripple effects of an interdependent international economy under siege.
Yet not everything was grim for everyone. For in an inconspicuous corner of the Bonifacio Global City, a little-known energy company was making a name for itself. Long known as just another subsidiary of the Philippine National Oil Company, the PNOC Exploration Corporation made a lot of noise in the business world, beginning last year and riding that wave of slow and steady success to the present day.
From its humble beginnings as just another department of PNOC, PNOC EC has become a leader in energy exploration and production. It is no exaggeration to say that PNOC EC is now a major revenue engine for the country. As one PNOC EC executive said in a speech during the regular Monday morning flag ceremony at the company's posh, new Bulwagan Pagasa, the little brother who used to ask the big brothers for help with hat in hand has grown to be the good provider for
many.
Firm Leadership, Fiscal Prudence and Unprecedented Company Earnings
• Turned P 3 billion over to Pres Aquino during the company's 35th year anniversary celebrations in April of 2011
• Gross revenues of a little over P 10 billion for the 2011 fiscal year, and a net income of a little over P 3 billion
• Represented increases of 14% and 21% respectively from the 2010 figures, among the largest in company history
• Earnings per share increased from P1.24 in 2010 to P1.50 in 2011
• Declared its largest dividend in its 35 years at a little over P 5 billion last year
• No outstanding loan obligations and has a positive cash balance of P1.85 billion as of Dec. 31 2011
• Uncollateralized credit lines in the amount of P19.25 billion from the top local and international financial and banking institutions
Integrity, Honesty, Transparency
• Following Pres Aquino's lead in the Daang Matuwid to combat all graft and corruption in government and all its in- strumentalities
• Making certain that the law is strictly followed in all company operations as a GOCC especially against vested interests
• Reforming the coal trading business of the company to ensure that vested interests no longer hold
• PNOC EC strictly adheres to Republic Act 10149, the GOCC Governance Act of 2011 which states in its Section 2, B that "The Operations of GOCCs are rationalized and monitored centrally in order that government assets and resources are used efficiently and the government exposure to all forms of liabilities, including subsidies, is warranted and incurred through prudent means." • Multiple bids and awards committees • Lots are drawn as to which procurement requests will go to a given BAC
• Proponents will go through a thorough step-by-step system of getting the best value for any given requisition item
Health and Safety for Our Own and Our Neighbors
• Malangas Project Operations were given a citation by the Department of Energy for accumulating over 2 million man-hours without lost-time accidents
• Kaagapay provides health, educational, sanitation and other social services to the various host communities
• Setting up Health Diagnostic Centers in main office and five other allied clinics in field offices in Zamboanga Sibuguey, Cebu and Batangas to serve employees nationwide, including needy members of host communities
• Zamboanga Sibuguey facility even has a new helipad for medical evacuation in extreme and urgent circumstances.
P 500 million Endowment to ensure Competent Human Resource Base
• Has established an endowment fund of P 500 million for the University of the Philippines to provide scholarships, research grants and professorial chairs in the disciplines of geology, engineering, and other related fields of study
• Grantees will be required to work in PNOC EC for at least one year for every year of scholarship. PNOC EC already released the second tranche of P 125 million this year
• In line with President Aquino's government program. "Education is the great equalizer."
Looking to the Future
• Adopted a work program for oil, gas and coal development and exploration from 2012 to 2016, involving an estimated investment cost of more than P20 billion
• Undertaking all measures to discover the next Malampaya to ensure energy security and self-sufficiency for the country
• Expanding current exploration operations in order to better identify and pinpoint the most viable sources of energy for the country
• Includes the establishment of mine-mouth power plants to produce electricity and the distribution of CNG for public transport
• Further programmed development of coal mining and production for energy requirements
• Taking all necessary steps to establish new power generation facilities in Mindanao and Central Luzon in order to meet the growing power requirements for both areas and help expedite development in the same
• Develop CNG fuel facilities with the vision of providing fuel for all public utility vehicles in Metro Manila and surrounding areas