Philippine refiner Petron Corporation has offered to sell its 180,000 b/d complex at Limay in Bataan to the government so Manila can stabilize prices and secure the supply of petroleum products in the domestic market.
"Having control of the largest petroleum refining assets in the country will place the government in a better position to develop and devise comprehensive and long-term programs and solutions," Petron Chairman and CEO Ramon Ang said in a letter dated Tuesday to Department of Energy Secretary Jose Rene Almendras.
"Through this acquisition, the government will enjoy significant influence on prices of petroleum products and in securing the supply of petroleum products in the country," he said in the letter, a copy of which was released to the Philippine Stock Exchange.
Ang added that Petron was ready to discuss the appointment of a mutually acceptable third party to establish a valuation basis and transaction structure for the sale of the Bataan refinery.
Petron said the government had its "full support and cooperation" in its efforts to counter the adverse impact of high oil prices in the domestic economy. Price increases have prompted calls for the government to revisit its Downstream Oil Industry Deregulation Law (RA 8479) and to increase its participation in the local oil sector.
"However, Petron believes that reverting back to the regulated regime is not the solution ... The company believes that deregulation has been most beneficial to the economy as well as to the downstream oil industry and should thus be continued to be implemented by the government," Ang said.
"Public opinion urging the government to reinvest in Petron as a means to attain effective participation in the industry has reached us," he added. "The company is open to this idea. In particular, we are ready to offer our refinery assets for possible reacquisition by government if this will assist in attaining the government's objectives at this time."
Petron last April announced plans for a $1.8 billion upgrade of the Bataan refinery. The project, to be completed by the end of 2014, would increase the plant's flexibility by enabling it to process a wider range of crude oil, including African grades, the company said at the time.
In addition to Petron, Shell operates a 110,000 b/d refinery in the Philippines. Caltex, the local unit of Chevron, shut its Philippine refinery in 2003 and now operates two fuel import terminals in the country.
Petron also owns more than 1,700 service stations in the Philippines. The company is 65% held by local conglomerate San Miguel Corporation.
