Petron eyes new $10-b refinery
Petron Corp. plans to team up with foreign oil players to put up a new 250,000-barrel-per-day refinery in Bicol region at a cost of $10 billion.
Petron president and chief executive Ramon Ang said the new refinery would be established in Bicol “to supply Luzon and to supply Visayas and Mindanao.”
He said Petron was also studying Cebu as the possible location of the new refinery, which would be bigger than Petron’s existing 180,000-barrel-per day refinery in Bataan.
Rival Pilipinas Shell Petroleum Corp. also owns a refinery in Batangas with a capacity of 110,000 barrels a day.
“[It would be] a 250,000-barrel-a-day oil refinery. I hope to be able to invite one of the big boys like Aramco [Saudi Arabian Oil Co.] or Kuwait Petroleum [Corp.] to come and put up a new oil refinery. There a lot of big-time companies that want to put up an oil refinery here,” Ang said.
Ang said he would also invite William Wang, chairman of Taiwanese conglomerate Formosa Plastics Group, to invest in the new refinery. Formosa has an oil refinery that has a capacity of 450,000 barrels a day.
“I can also invite Formosa Oil Refinery. Formosa Oil Refinery is one of the biggest in the region. They are 10 times bigger than Petron in Taiwan,” Ang said. Wang is set to visit Petron in February.
Ang said once he convinced the investors to team up with Petron, the company would immediately put up the new refinery which would take four years to build. “And by then, the demand is already very big,” he said.
He said the refinery would entail a massive investment. “To put up an oil refinery of 250,000 barrels a day, the cost would be $10 billon,” he said.
Ang said Petron was looking for another location because its existing refinery in Bataan had no space for expansion. “And we don’t want to put all our eggs in one basket,” he said.
San Miguel Corp., the parent company of Petron, said it allocated P281 billion in capital expenditures for 2017 to 2019 as it continued to expand new and traditional businesses.
San Miguel chief finance officer Ferdinand Constantino said during an institutional briefing that for this year alone, the conglomerate would spend P63 billion primarily for infrastructure, power and food businesses. The remaining P191 billion will be spent between 2018 and 2019.
Constantino said the company was aiming to grow revenues by 1.5 times from 2015 to 2020 while earnings before depreciation and amortization were expected to increase twice over the same period.
“We want to enhance our established businesses. We are not forgetting the old business and we will we continue to grow our food and beverage business and also our packaging business,” Constantino said.
“Want will also diversity into industries help the country grow, like power, infrastructure and fuel and oil. We will also pursue synergies among the businesses,” he said.
San Miguel increased its revenues by four times to P674 billion in 2015 from P168 billion in 2008.
The conglomerate is raising up to P20 billion from the issuance fixed-rate bonds in February. Constantino said the proceeds from the bond offering would be used to partially refinance loans. With Jenniffer B. Austria