Corporate News



By Victor V. Saulon, Sub-Editor


PetroEnergy expects profit boost from renewable energy plants




Posted on July 27, 2017


PETROENERGY Resources Corp. expects net income this year to grow by 33% on higher electricity sales from renewable energy plants, including the Tarlac solar farm that is on its first full year of operation, company officials said.

“Our forecast is upbeat for 2017 since our first-half financial performance already showed a marked improvement in revenues and net income compared to the same period last year,” PetroEnergy President Milagros V. Reyes announced during the company’s annual stockholders meeting on Wednesday at RCBC Plaza in Makati City.

“If this efficiency is maintained, we project a 33% increase in our net income by the end of this year,” she added.

PetroEnergy reported its earnings jumped 27% to $5.8 million in 2016. At a 33% growth rate, the company could post a $7.7-million profit this year. PetroEnergy reports its financial data in dollars for ease in accounting for its overseas oil revenues.

Francisco G. Delfin, Jr., PetroEnergy vice-president, said the company’s geothermal, wind and solar renewable energy businesses were doing well so far this year.

Mr. Delfin said among this year’s growth drivers is the 50-megawatt (MW) solar project in Central Technopark in Tarlac City. The solar farm will be reporting its first full year of operation in 2017 as against 2016’s 10-month commercial run.

The geothermal project is also expected to be up the entire year, which compares with the reported shutdown in 2016.

Carlota R. Viray, PetroEnergy assistant vice-president for finance, said this year’s earnings would also get a boost from the slight recovery in oil prices. She said oil was trading at around $50 a barrel this year, up from around $35 a year ago.

The company’s oil business contributes around 15% of income, Mr. Delfin said, while geothermal accounts for 40%, with solar and wind equally account for the rest.

PetroEnergy is planning to expand its Tarlac solar farm by 49 MW and is looking for power supply contracts for the higher output.

Tarlac-2, which is expected to cost P2.4 billion, is one of three projects in the pipeline. The other two are the 14-MW Nabas-2 wind farm costing P1.6 billion, and a 5- to 10-MW solar power project in Puerto Princesa with a battery storage component for P855 million.

A fourth project -- the 12-MW second phase -- has reached financial close as banks agreed to lend 30% of the P1.9-billion project cost after PetroEnergy secured a power supply agreement (PSA) with Phinma Energy Corp.

The expansion projects have a total price tag of P6.755 billion spread within the next two years, company officials said.

Aside from the Tarlac project, PetroEnergy has a 20-MW geothermal power plant in Sto. Tomas, Batangas under subsidiary Maibarara Geothermal, Inc. and 36-MW wind farm in Nabas-Malay, Aklan.

“As we continue to operate our existing geothermal, wind and solar plants, we plan to expand these to bring up our total gen capacity to 200 megawatts in the coming two to three years,” Ms. Reyes told stockholders.

“We now have 106 MW with an addition of 12 MW expected to be put onstream by the last quarter of 2017,” she said. “We are presently studying various options to increase our competitiveness in the renewable energy business.”

Before venturing into renewable energy, PetroEnergy has been a purely oil and gas exploration company and has benefited from its oil discovery in Gabon, West Africa in 2000.

Ms. Reyes said the Gabon venture brought in around $121 million or P5.5 billion since the start of production in 2002.

“However, since oil is a depletable resource, your company decided to use its earnings to venture into clean power generation in 2012. Our diversification was very timely such that as the oil prices crashed in 2014 and remained unexpectedly depressed, our revenues from our renewable energy projects came in to keep our financial position positive,” she said.

On Wednesday, shares in PetroEnergy jumped 11.62% to close at P8.55 each.