MANILA, Philippines - Petron Corp., one of the country’s oil refiners, on Wednesday said it is investing in ExxonMobil’s downstream oil operations in Malaysia.
In a disclosure with the Philippine Stock Exchange (PSE), Petron said the investment plan was approved during its executive committee’s meeting on Wednesday.
The amount and percentage sharing for the investment has yet to be determined, Petron said.
Downstream oil operations involves retail and distribution.
San Miguel Corp. (SMC), which now fully owns Petron, said last year that Petron would be in charge of Exxon operations.
In August last year, SMC announced it had acquired for $610 million Esso Malaysia Bhd. (EMB), a publicly traded company of which ExxonMobil owns a 65-percent stake; and wholly owned Exxon Mobil Malaysia Sdn. Bhd. and Exxon Mobil Borneo Sdn. Bhd.
SMC said the three subsidiaries form an integrated business engaged in the refining, distribution and marketing of petroleum products.
Eric Recto, SMC director, said the physical assets include the Port Dickson refinery with a rated capacity of 88,000 barrels per day; seven fuel distribution terminals; and a network of roughly 560 branded service stations, 420 of which are company-owned.
Recto said that SMC would fund the expansion program through internally generated funds and loan and some equity.
Recto said SMC has already received offers from both Malaysian and international financial institutions.
“Malaysian banks will be more adept at providing financing for Malaysian opportunities, Filipino banks will not be as competitive in providing ringgit financing,” he said.
Recto said SMC is looking at a number of financing structures.
Recto said Esso currently has over 500 stations in Malaysia, which is second to Malaysia’s largest oil player, Petronas.
“We are a smaller player in Malaysia, but we intend to be a strong, secondary player in that market. We think we will continue to grow from a consumption standpoint,” he said.
Recto, who is also Petron’s president, said SMC sees the potential of the oil business in Malaysia.
“We want to develop that potential the way we saw the potential in Petron. Three years ago, when we took over Petron and we’ve seen how successful we have been in turning the company around and we want to do the same in Malaysia,” he said.
Recto said they are looking at a supply synergy between Petron and Esso.
Petron owns a 180,00 barrels a day refinery in Bataan while the Malaysia refinery has a capacity of 88,000 barrels per day.