Petron allots P11 billion capex this year

MANILA, Philippines — Petron Corp. has set its capital budget this year at P11.05 billion to continue expanding its retail network and improve operations here and abroad.

In a regulatory filing, Petron said the estimated 2021 capex, which is 30 percent higher than last year’s P8.48 billion, would be spent on its refinery in Bataan and the expansion of its retail networks in the Philippines and in Malaysia.

The capex budget will be funded by a combination of internal cash generation and external financing sources.

Petron said it would continue to make investments in its Petron Bataan refinery facilities to ensure reliability and efficiency of critical refinery processes and to reduce costs.

“The company is currently constructing a new power plant to replace some of its old generators and generate incremental power and steam. In addition, products previously used as refinery fuel will be converted to high-value products,” it said.

In a filing with the Department of Environment and Natural Resources-Environment Management Bureau (DENR-EMB), Petron proposed to implement upgrades through the Petron Refinery Special Projects with an estimated cost of P11 billion.

The project is expected to start pre-construction works by July 2022 and commercial operations by January 2024, while the fuel transfer line is targeted to be commissioned by June 2021.

It will aid the Bataan refinery to shift to cleaner technology in the production of its steam and power requirements by replacing some of its old fuel oil fired boilers, as well as alleviate the refinery’s product pier utilization and traffic through the construction of new transfer facilities.

After the Authority of the Freeport Area of Bataan (AFAB) approved Petron’s application to make its Bataan refinery one of the registered enterprises of the freeport zone, the oil firm committed to invest P3 billion to improve its refinery in the next five years.

Petron’s 180,000 barrels per day refinery – the only remaining refining facility in the country – produces high-value petroleum products and petrochemicals capable of supplying 40 percent of domestic demand.

It was shut down in May last year to give way to maintenance activities on major process units and to mitigate the impact of low fuel demand and poor refining margins. It resumed operations in October.

Petron again placed its Bataan refinery on economic plant shutdown in February “considering that the refining business remains challenging both here and around the world,” and is targeted to operate again in the second half of the year.