Phoenix Petroleum ventures into LPG

MANILA, Philippines -  Publicly-listed oil firm Phoenix Petroleum Philippines Inc. is venturing into the liquefied petroleum gas (LPG) retailing business following its acquisition of the local unit of Malaysian oil and gas company Petronas Dagangan Berhad (PDB).

Phoenix said it entered into a memorandum of understanding (MOU) with PDB (Netherlands) B.V., a wholly-owned subsidiary of PDB, to fully acquire Petronas  Energy Philippines Inc. (PEPI) and its affiliate Duta Inc.

PEPI has been engaged in the business of selling LPG in cylinders for household and commercial use as well as LPG in bulk for industrial use and autogas, an environmentally-friendly alternative fuel for vehicles, for over 20 years.

Meanwhile, DUTA manages and holds the various land parcels used in relation to PEPI’s business.

The company said the acquisition would be subject to the approval of the Philippine Competition Commission.

 “We are very excited about this asset not only because it represents a new product that Phoenix can offer but also because we know that it has been operated in line with the operating standard of Petronas, a Fortune 500 company. PEPI’s level of excellence, professionalism and adherence to the highest of global standards is impressive,” Phoenix president and CEO Dennis Uy said.

Earlier, the company set a budget of up to P10 billion to finance its aggressive growth plan in the next three years, with bulk, or about P6-8 billion allocated for possible acquisitions of companies in oil or related business such as lubes and LPG, Phoenix vice president for external affairs Raymond Zorilla said.

With the foray into the LPG space, Phoenix aims to build significant presence in the non-fuel petroleum markets which currently account for about one percent of the company’s business.

The company views the LPG business as a strong strategic fit as it broadens its product portfolio and petroleum presence with particular emphasis in Visayas and Mindanao.

PEPI generates most of its sales in Visayas and Mindanao – under-penetrated regions, with increasing disposable incomes and attractive demand prospects.