Petron seeks partners for new $10-B refinery

MANILA, Philippines - Oil refining giant Petron Corp. is seeking partners for a new refinery–estimated to cost $10 billion–south of its Bataan facility to cater to growing demand in the country, its top official said.

The company is planning to build a new oil refinery in the south to augment its supply and meet demand in the coming years, Petron president and CEO Ramon Ang said.

He said the new refinery is targeted to have a capacity of 250,000 barrels per day, nearly double its upgraded Bataan refinery’s 180,000 barrels per day output.

“For Petron, what we plan is to put up a new oil refinery at 250,000 barrels a day somewhere in the south, maybe in Bicol, to supply Luzon, Visayas and Mindanao,” Ang said.

The company is looking for land in Bicol but it is also considering Cebu as another location for the refinery since it is also a big market, he said.

Apart from location, Petron is also seeking to forge partnerships with global oil players for the refinery due to its huge estimated cost of $10 billion.

“I hope to be able to invite one of the big boys–Aramco, Kuwait Petroleum–to come in and to put up a new oil refinery. One I can invite also is Formosa Oil Refinery, which is one of the biggest in the region and is 10 times bigger than Petron,” Ang said.

Aramco, officially known as Saudi Arabian Oil Co., is a Saudi Arabian national petroleum and natural gas company and was named by Forbes as the biggest energy company in the world.

Kuwait Petroleum Corp. is Kuwait’s national oil company while Formosa Petrochemical Corp. is Taiwan’s only listed oil refiner.

Ang said Formosa chairman William Wong will be in the country to look at possible investments in the country.

“I went to visit them a couple of months ago and we are in talks to look for more business together,” the Petron official said.

Once partnership is sealed with any of the oil giants, the new Petron refinery will start construction to catch up with demand, Ang said.

“It will take four years to finish. By then, the demand is already very big. And to put up an oil refinery of 250,000 barrels a day, it will cost you $10 billion,” he said.

At the start of 2016, Petron commissioned the $2-billion refinery upgrade project, allowing it to produce more high-value fuels and petrochemicals. It said costs have gone down since its 180,000 barrels-per-day Bataan refinery can now process cheaper crudes.

The upgrade is expected to foster Petron’s profitability towards end-2016 and this year due to improved margins from the upgrade of its refinery, despite the continued drop in global crude prices.