Saudis show interest in RP oil industry

The Kingdom of Saudi Arabia has reportedly expressed interest in a proposal for a joint venture with Filipino businessmen to engage in oil exploration in the Philippines and to put up a new oil refinery in the country.

The Saudis are also interested in helping revive either one of two moribund petrochemical plants in the country. This was revealed by Oscar C. de Venecia, head of the Philippine Chamber of Commerce and Industry (PCCI) international and trade affairs delegation which visited KSA from Oct. 1 to 3.

De Venecia said, the possible joint oil exploration alone could bring in new investments of $800 million.

According to de Venecia, Saudi officials led by Dr. Yousef Bin Tarad Al-Saadon, Deputy Minister of Foreign Affairs for Economic and Cultural Affairs, Ambassador Mohammad Ameen Wali, Saudi Ambassador to the Philippines and Dr. Sammy Bin Abdullah Al-Saleh, general director of the Office of Economic Bilateral Relations of the Ministry of Foreign Affairs, expressed the KSA’s continuing support and interest to invest and conduct trade with the Philippines.

As proof of that commitment, de Venecia said, KSA officials extended a $20-million loan for the construction of several roads in Mindanao.

The Saudi government likewise signed an agreement for the promotion and encouragement of investments in both the KSA and the Philippines.

Saudi interest in putting up a refinery comes on the heels of recent pronouncements by Shell Philippines that it is reviewing its refining operations in the country in the face of lack of support from the Philippine government with regard to tariff protection and incentives for their continued operation.

Aside from Shell’s oil refinery, the only other oil refinery operating in the country is that of Petron’s Bataan Refinery Corporation in Limay, Bataan. Caltex Philippines had already shut down its refinery long ago.

De Venecia said the Saudi officials reaffirmed their commitment to continue supplying the Philippines with oil especially because of their investment in Petron.

The Saudis also expressed interest in plans to revive either one of two mothballed petrochemical plants – the Bataan Polyethylene Corp. and the Petrochemical Corp. of the Philippines.

Aside from oil refinery and petrochemical production, de Venecia said, the Saudis also expressed interest in joint ventures in mining in both countries.

The KSA, de Venecia said, needs trained technical people to help exploit their mineral resources. He said the Saudis are inviting interested Filipino mining firms with the proven technical know-how to team up with other foreign firms with the financial clout to help exploit KSA’s still largely untapped mineral resources.

The Saudis are likewise interested in encouraging more cooperation in various industries such as spare parts, furniture, information technology, chemical products, desalination, engineering, tourism and food products.