Jatropha Mega-Nursery and Plantation

The PNOC-AFC actively conducted an ocular survey of potential sites for the mega nurseries and plantations during the second half of 2006.  The considerations for the possible choice of locations for the nurseries and plantations are based on land availability, climate, soil type, demography and accessibility to the planned refinery and extraction facilities.  The areas that were surveyed were Cagayan de Oro, Bukidnon, Agusan Norte, Agusan del Sur and Butuan.  The identified sites, mostly categorized as ancestral lands, totalling to about one million hectares (has.), were certified by various community landowners / cooperatives.

For the past six months, field assessment and evaluation on the possible sources of planting materials were conducted all over the country to determine if the available supply of planting materials is ample to meet the required volume for plantation.  Eleven provinces were identified as potential sources of these planting materials.  These provinces were Nueva Ecija, Laguna, Batangas, Camarines Norte, Camarines Sur, Albay, Sorsogon, Masbate, Cagayan de Oro, Agusan del Norte, and Bukidnon.  Based on the latest inventory, the various nurseries located in the provinces could provide about one million of planting materials (seedlings and cuttings) for the mega-nursery.

During the last half of 2006, meetings/discussions were carried out with several research institutions and facilities specializing on tissue culture, plant breeding, germplasm management, seed technology and varietal improvement.  They included the Department of Science and Technology (DOST), Philippine Council for Agriculture, Forestry and Natural Resources Research and Development, National Biotech in the University of the Philippines at Los Banos (UPLB), Institute of Plant Breeding in UPLB, Freshwind Biotech Corp., Mendez Organic Farms and Biogreen in Malaysia.

These various research and development activities are aimed to facilitate the rapid propagation of seedlings and to identify the best variety of jatropha seeds/seedlings that can provide the maximum oil yield.

As part of its business strategy, the Company negotiated with various potential partners/investors like farmers' cooperative/associations, landowners and oil companies for possible joint venture/partnership to transform land with aggregate area of 700,000 hectares into jatropha plantations.

Jatropha Biodiesel Refinery

The PNOC-AFC’s technical staff made an initial assessment on several areas for possible locations of the refineries since June 2006.  Primary considerations in choosing the appropriate locations are the proximity to the plantations to reduce the transport/delivery cost of feedstock to the refinery, availability of utilities, i.e. power, water and communications, accessibility to major roads, direct terminal access to ocean vessels  (jetty facilities) and general peace and order situations.

Likewise, the PNOC-AFC coordinated with Philippine Economic Zone (PEZA) since PEZA sites are considered the most viable locations for refineries as they provide not only the above mentioned features but also provide a package of incentives under its Charter.  The areas evaluated as potential sites for refinery were Phivedic in Tagaloan, Misamis Oriental; Nasipit Agusan del Norte Industrial Estate; General Santos in South Cotabato; and PNOC-AFC Industrial Park in Bataan.

The entire biodiesel project entails the construction of oil extraction, biodiesel refinery and transesterification.  The PNOC-AFC assessed the local capability to develop its own oil expeller/extraction facility.  Jatropha oil extraction technology on the commercial scale is still in its development stage, just like in other countries.

In addition, the Company coordinated with the DOST – Philippine Council for Industry and Energy Research and Development and the Industrial Technology Development Institute on the development of oil extraction and biodiesel technology for jatropha in the same manner of what they developed for coco-diesel.

Last August 2006, the PNOC-AFC entered into an MOU with Samsung Corporation to explore in cooperative ways as prospective strategic partners the successful implementation of the “Jatropha-Based Biodiesel Producing Project” under mutual collaboration.  Majority of the companies that were tapped as potential partners in the refinery business were the same companies that were considered as possible partners in the establishment of jatropha plantations.

Conduct of Feasibility Study on an Integrated Jatropha Biodiesel Project

The PNOC-AFC conducted a feasibility study to establish the economic and financial viability of putting-up an integrated jatropha biodiesel project in the country.  The viability of the project was determined using various economic and financial parameters.  Several simulations were also done to determine the sensitivity of the project on various economic and financial conditions.

PNOC-AFC Industrial Park

As indicated under the Locators Agreement, the PNOC-AFC Industrial Park provided continues services to locators such as provision of raw and fire water, power supply within the Park and other commercial areas, and jetty services.  Moreover, health, safety, security and environment (HSSE) programs were implemented.

Below were the activities undertaken at the PNOC-AFC Industrial Park, among others:

• Conduct of Emergency response seminar, first aid training and organizational meetings of the Multi-Partite Monitoring Team
• Preparation of the Comprehensive Land Use Plan (CLUP) and Zoning Plan of Limay and Mariveles
• Preparation of amendment to the allocation of the Environmental Liability Guarantee Fund (EGLF) contributors per locator
• Preparation of the Guidebook Interim
• Conduct of regular water and ambient air quality monitoring

On social development, the PNOC-AFC Industrial Park accomplished the following:

• Livelihood programs to the Lamao Multi-Purpose Cooperative and groundworking and cooperative formation activities with Lamao Bakers Association
• Coordination with local government units (LGUs) on the conduct of community needs assessment
• Conduct of Safety Services Training Seminars in coordination with PNRC Bataan Chapter, PNOC-AFC ERT, Barangays Lamao and Batangas Dos.
• Coordination with Rural Health Units of Mariveles regarding Dong In Tulay Center for the rehabilitation of needy children who are residents of Barangays Lamao and Batangas Dos (Donation to the Dong In Rehabilitation Center amounting to P150,000 was already approved.)