Petron allots P1.79B for capex next year

Oil refiner Petron Corp. is allocating a lower amount of P1.79 billion for its capital expenditures in 2009.

A Petron official said the capex for next year would be used for a variety of projects for refining, marketing and operations.

For this year, Petron has budgeted to spend to P3.1 billion.

The official said more than half of the budget will go to refinery operations.

At the same time, the official said the Petron board has approved the business plan of the oil firm for the period 2009-2013.

The board also approved the ratification of acceptance of Board of Investments (BOI) terms and conditions on the ethanol-gasoline blending facility of the oil company.

The board also gave the go-signal for the revision of the current level of appropriated retained earnings of P21 billion and the setting of a new level in the amount of P23.8 billion for the current fiscal year.

As this developed, Petron reported it had received the first shipment of 300,000 barrels of Palawan Light from the Galoc oil field at its refinery in Limay, Bataan.

Petron is the first oil company to buy and process crude oil from Galoc, the country’s latest production well.

The Galoc field started commercial production on Oct. 9, 2008 and is producing about 15,000 to 20,000 barrels daily.

The production figure is equivalent to about six percent of the country’s total daily demand of 300,000 barrels. Crude oil from Galoc is expected to generate foreign exchange savings amounting to over a billion dollars during its lifetime.

“We are proud to be the first oil company to process Palawan Light since this is an important step towards realizing our country’s goal of having energy self-sufficiency,” Petron chairman and CEO Nicasio I. Alcantara said.

“The success of Galoc oil field should accelerate oil exploration activities and investments in the country.”

Palawan Light is considered a light-medium crude grade and is similar to Arabian Light and Umm Shaif.

The Galoc field is located 65 kilometers northwest of Palawan in 290 meters of water under Service Contract 14-C. Probable reserves are estimated at between 10-20 million barrels.

Petron operates the largest oil refinery in the country with a capacity of 180,000 barrels per day. It is capable of producing the full range of petroleum products including petrochemical feedstocks such as mixed xylene and propylene. It supplies nearly 40 percent of the country’s total fuel requirements. It has 1,300 service stations nationwide.

Alcantara said its refinery will test-run the crude from Galoc in order to determine future lifting requirements.