2021
Annual Report
About the cover Learning from all the experiences and challenges brought by the pandemic, PERC is even more equipped to deliver top-rate financial and operational results. It’s 2021 Annual Report cover gives a glimpse of its goal of significantly expanding PERC’s footprint in the renewable energy space.
The paper used in this Annual Report is certified by Programme for the Endorsement of Forest Certification (PEFC) signifying that the forest-based materials used in the paper came from sustainably-managed forests. Our printer, Primex Printers, Inc., also utilizes Kodak Sonora process-free plates, soy-based ink, and a Heidelberg carbon neutral offset press resulting in lesser chemical wastes and air contaminants during the printing process. These show how PERC gives high importance to environmental preservation and to its sustainability journey.
Our Vision To grow into one of the most profitable publicly-listed energy companies in the Philippines.
Mission Meeting energy needs while providing optimum value to our shareholders, training and developing our employees, and uplifting the communities where we operate.
Table of Contents I. II.
Financial and Operational
VI. Officers and Managers
Highlights
VII. Corporate Directory
Message to our Shareholders
VIII. 2021 Audited Consolidated
III. PERC Facilities and Projects IV. PERC CSR Reach V.
Board of Directors
Financial Statements IX. Office and Site Directory
I.
Financial and Operational Highlights
II.
Message to Our Shareholders
The year 2021 began with a more encouraging outlook as pandemic restrictions were loosened and businesses re-opened. By the end of the year, despite uncertainties brought by geo-political tensions, a national elections campaign, and lingering COVID-19 challenges, your Company achieved good operational and financial outcomes.
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We performed fairly well last year delivering a 3% increase in our consolidated net income, and a 2% increase in our net income attributable to equity holders of the Parent company, despite a Php 304 Million impairment recorded on the Company’s West Linapacan and Octon petroleum service contracts (SC). The Company ended 2021 with a consolidated net income of Php 665 Million, driven largely by the recovery in volume of oil production, global
Helen Y. Dee Chairman of the Board
increase in oil prices, and the high electricity sales from our Tarlac-2 Solar Power Plant.
The PetroEnergy Group maintained a healthy financial position with Php 13.2 Billion assets.
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Operations Even as we expand our renewable energy (RE) portfolio, we continue to participate in upstream petroleum business. Our Gabon oilfield yielded a total crude production of 5.42 million barrels of oil (MMBO). The Consortium commenced a four-well drilling program in December 2021 aimed at sustaining the field production to above 20,000 barrels of oil per day (BOPD). The first well was put on-line on February 2, 2022, while the other three (3) wells are to be completed within the year. Given the contract extension granted by the Gabonese government in 2018, the Consortium is currently firming up the most feasible Integrated Field Development Plan (IFDP) to extract the remaining recoverable oil volumes until at least 2028 up to 2038. A total of 124 MMBO has been extracted from the field from inception in 2002. Our local petroleum projects were affected by geopolitical constraints and pandemic consequences hampering the timely execution of work programs. On October 14, 2020, the Department of Energy (DOE) officially lifted the Force Majeure imposed on our Service Contract 8
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(SC) 75 – Offshore Northwest Palawan. This allowed our SC-75 Consortium, led by PXP Energy, to engage various foreign and local contractors for the committed 3D seismic survey over the block. However, the DOE retracted the Force Majeure lifting in April 2022, when our contractors were already mobilized to the project site, citing “political, economic, and national security implications of any activity in the West Philippine Sea”. With no choice but to comply with the sudden reversal in government policy, the Consortium terminated the 3D seismic survey activities. The Consortium will wait for final instructions from the DOE. Our SC 14C2 – West Linapacan field is undergoing third-party technical evaluation to assess potential additional production opportunities. Given the high oil prices prevailing, such field may prove to be attractive. For our third block, SC 6A – Octon-Malajon, operator Philodrill formally notified the DOE that the Joint Venture (JV) has decided not to proceed with its appraisal programs and potential development of the areas due to limited term. The service contract is expiring in February 2024. In view of this, PetroEnergy has written off about Php 159.3 Million in deferred costs.
Our renewable energy business were largely spared from the impacts of the COVID-19 pandemic. The 20-MW Maibarara-1 and 12MW Maibarara-2 Geothermal Power Plants in Batangas exported a combined output of 251 GWh translating to Php 1.01 Billion in electricity revenues. The two geothermal power units also successfully underwent major preventive maintenance in February 2022.
the health crisis. We extended COVID-19- related support to our employees, host communities, and partner local government units, through our We Power Health, Education, and Livelihood Program (We Power H.E.L.P.) outreach.
In Tarlac, our 50-MWdc Tarlac-1 and 20-MWdc Tarlac-2 Solar Power Plants exported a total of 104 GWh of power to the Luzon grid in 2021. This yielded electricity sales of Php 886.2 Million. Since our in-house technical team took over the operations and maintenance (O&M) of the solar farms, reduction in operational costs and improved efficiency in power generation have been recorded. On the other hand, our 36-MW Nabas-1 Wind Power Plant in Aklan supplied 91.3 GWh of clean energy to the Visayas grid with gross revenue of Php 762.8 Million. All told, our RE ventures brought in Php 2.66 Billion in gross revenues in 2021. Our Company’s commitment to sustainability and corporate social responsibility (CSR) has remained strong, despite limitations caused by PETROENERGY RESOURCES CORPORATION
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Looking Ahead After months of studies and stakeholder consultations, the DOE and World Bank Group (WBG) officially launched in April, 2022, the Philippines’ offshore wind roadmap, setting out plans to achieve 21 GW of offshore wind power by 2040. This is a welcome development for our Company as we embark on our pre-development studies of our three (3) offshore wind service contracts covering the areas of Northern Luzon, Northern Mindoro, and East Panay. These are Service Contracts granted to us by the DOE in 2021. We have been working steadily with our Danish partner to advance our feasibility studies and pre-development works in these areas. We are actively pursuing our Nabas-2 Wind Power Project (Nabas-2), which will add 14 MW to our existing 36 MW Nabas-1 facility. On February 17, 2021, the Department of Environment and Natural Resources – Environmental Management Bureau
We have plans to go completely renewables, ending our decadeslong and profitable engagement in upstream petroleum.
(DENR-EMB) Region 6 issued the amended Environmental Compliance Certificate (ECC) to operator PetroWind Energy Inc. (PWEI) for Nabas-2, while the Forest Land Use Agreement (FLAg) was issued last December 28, 2021. With these positive developments on the project permitting, we are eager and ready to push forward. Our Company is also progressing with greenfield solar projects. The DOE officially approved on April 18, 2022, PetroGreen Energy Corporation’s (PGEC) Solar Energy Operating Contract (SEOC) for our 25MWdc Bugallon (Pangasinan) Solar Power Project (BSPP). Our proposed 25-MWdc Dagohoy (Bohol) Solar Power Project (DSPP) is awaiting its SEOC approval as well. Aside from these two greenfield solar projects, we are planning a second expansion of our Tarlac Solar Power Project by another 29 MWdc.
The Next Big Move The COVID-19 pandemic’s impacts have been stark, deep, and widespread, affecting not only the country’s health care system but our governing institutions, social life, and business operations. In the energy sector, the disruptions in the global supply chain led to shortages in coal imports needed by local power generators and health and travel restrictions made it difficult to mobilize foreign contractors and experts needed for urgent repairs. As important, the value of a healthy environment made clear by the pandemic underscores the need to shift away from polluting fossil fuels.
and immediate goal in the near-term but large-scale offshore wind offers exciting opportunities to exponentially scale up our operations in the future. Hence, forging strong partnerships with credible foreign partners will be a critical component. We are also strengthening and broadening use of information and technology (IT) across our operations. We are engaging our employees to innovate and adapt to new ways of working and doing business while simultaneously training and promoting younger staff to positions of authority to ensure business continuity.
Your Company is taking all these lessons and more to heart. We have plans to go completely renewables, ending our decades-long and profitable engagement in upstream petroleum. This focus on the long-term is complemented by efforts to make our current operations and systems more robust and agile, able to withstand external shocks while continuing to deliver top-rate financial results. New solar power projects will become our principal
With our Board’s guidance, our Management’s determined stance, our Teams’ dedication, and our Shareholders continued trust, we are prepared for our Company’s next big moves.
2000-MW Northern Luzon Offshore Wind (Ilocos Norte)
32-MW Maibarara Geothermal Power Plant (Batangas)
140.8-kWp ETY Bldg. Solar Rooftop Project (Binondo, Manila)
14-MW Nabas-2 Wind Power Project (Aklan)
25-MWdc Bugallon Solar Power Project (Pangasinan) 29-MW Tarlac-2B Solar Power Project (Tarlac)
70-MWdc Tarlac-1 Solar Power Facility (Tarlac)
1000-MW Northern Mindoro Offshore Wind (Occidental Mindoro)
SC 14C2 - West Linapacan
E
SC 75 - Northwest Palawan
10-MWdc Puerto Princesa Solar Power Project (Palawan)
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10MW-San Vicente Wind Power Project – Hybrid (Palawan)
III. PERC Facilities and Projects in the Philippines
Operating Renewable Energy Facilities
RE Projects in the Pipeline
20MW Maibarara-1 Geothermal Power Facility (Batangas)
14MW Nabas-2 Wind Power Project (Aklan)
12-MW Maibarara-2 Geothermal Power Facility (Batangas
10-MW San Vicente Wind Power Project – Hybrid (Palawan)
36-MW Nabas-1 Wind Power Facility (Aklan)
29-MWdc Tarlac-2B Solar Power Project (Tarlac)
50-MWdc Tarlac-1 Solar Power Facility (Tarlac)
25-MWdc Bugallon Solar Power Project (Pangasinan)
20-MWdc Tarlac-2 Solar Power Facility (Tarlac)
25-MWdc Dagohoy Solar Power Project (Bohol)
140.8-kWp ETY Bldg. Solar Rooftop Project (Binondo, Manila)
10-MWdc Puerto Princesa Solar Power Project (Palawan)
PH Petroleum Assets
2000-MW Northern Luzon Offshore Wind (Ilocos Norte)
SC 75 – Northwest Palawan
1000-MW Northern Mindoro Offshore Wind (Occidental Mindoro)
SC 14C2 – West Linapacan
500 to 1000-MW East Panay Offshore Wind (Iloilo)
25-MWdc Dagohoy Solar (Bohol)
500 to 1000-MW East Panay Offshore Wind (Iloilo) Solar Power Project Wind Power Project 36-MW Nabas-1 Wind Power Plant (Aklan)
Geothermal Power Plant Operating Renewable Energy Facilities Petroleum Asset
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IV.
PERC CSR Reach
Sustainability Highlights (in Php) Direct Economic Value Generated Direct Economic Value Distributed to employees, suppliers, provider of capital, government, and social responsibility projects
2.6 Billion
1.9 Billion
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Photo credits: Engr. Lew G. Delos Santos
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V.
Board of Directors Helen Y. Dee Chairman of the Board
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Lorenzo V. Tan
Cesar A. Buenaventura
Director
Lead Independent Director
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Milagros V. Reyes
Yvonne S. Yuchengco
Director and President
Director and Treasurer
Eliseo B. Santiago
Maria Mercedes M. Corrales
Independent Director
Independent Director
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VI.
Officers Milagros V. Reyes President
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Francisco G. Delfin, Jr.
Yvonne S. Yuchengco
Vice President
Director and Treasurer
Atty. Samuel V. Torres
Atty. Louie Mark R. Limcolioc
Carlota R. Viray
Corporate Secretary / Corporate Information Officer
Assistant Vice President for Legal and Corporate Affairs / Compliance Officer/ Alternate Information Officer
Assistant Vice President for Finance
Maria Victoria M. Olivar
Paul Elmer C. Morala
Vanessa G. Peralta
Assistant Vice President for Operations / Chief Risk Officer
Assistant Vice President for Power Plant Operations
Assistant Vice President for Corporate Communication / Chief Information Officer / Data Privacy Officer
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VI.
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Managers
Maria Cecilia L. Diaz De Rivera
Lordez May L. Duenas
Luzviminda B. Ledda
Chief Finance Officer
Assistant Chief Finance Officer
Comptroller
Irene S. Samaniego
Emerson T. Azul
Treasury Manager
Accounting Manager
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Arlene B. Villanueva
Jose V. Villena, Jr.
Head, HR and Admin
Senior Manager for Business Development
Yrel V. Ventura
Dave P. Gadiano
Senior Manager for Environment and Community Relations
Head, Energy Trading and Marketing
VII.
Corporate Directory
AUDITOR
BANKER
TRANSFER AGENT
SyCip Gorres Velayo & Co. 6760 Ayala Ave., 1226 Makati City
Rizal Commercial Banking Corporation G/F Ortigas Malayan Plaza Cor. Opal Road, ADB Avenue, Ortigas Center,
Rizal Commercial Banking Corporation G/F Grepalife Building, Gil J. Puyat Ave., Makati CIty T: (632) 8892-4156 / 8892-1416
Pasig City
CORPORATE OFFICE PetroEnergy Resources Corporation 7F JMT Corporate Building, ADB Avenue, Ortigas Center, Pasig City
T: (632) 8637-2917 / 8637-5799 / 8637-4032 / 8637-4362 E: ccu@petroenergy.com.ph Website: http://www.petroenergy.com.ph Follow: @PERCGroupPH in
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2021 AUDITED VIII. CONSOLIDATED FINANCIAL STATEMENTS
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IX.
Office and Site Directory
HEAD OFFICE 7F JMT Corporate Building, ADB Avenue, Ortigas Center, Pasig City T: (02) 8637-2917 / 8637-5799 / 8637-4032 E: ccu@petroenergy.com.ph
MAIBARARA GEOTHERMAL POWER FACILITY PLANT SITE: Sitio Capuz, Brgy. San Rafael, Sto. Tomas, Batangas LOGISTICS STATION: 329 Maharlika Highway, Brgy. Santiago, Sto. Tomas, Batangas T: (043) 784-3328
NABAS WIND POWER FACILITY PLANT SITE: Brgy. Pawa, Nabas, Aklan LOGISTICS STATION: Brgy. Gibon, Nabas, Aklan T: (036) 272-2714
TARLAC SOLAR POWER FACILITY PLANT SITE & LOGISTICS STATION: Central Technopark, Brgy. Lourdes, Tarlac City T: (02) 8400-1448