Chemoil Asia set to pull out of RP

Chemoil Asia, a subsidiary of Chemoil Corp. of the United States, is reportedly pulling out of the Philippines and may relocate its facilities in Malaysia.

Chemoil general manager Juan Armando Patag, however, refused to provide any details, saying "it is too premature" to talk about it and that there are "certain legal issues" that have yet to be resolved.

Company sources confirmed to The STAR in a phone interview that management has been busy preparing to pull out and is considering going to court although they did not say for what.

Chemoil decided last month to pull out of the Philippines due to problems related to the operation of its seven oil storage tanks on Nonoc Island in southern Philippines.

Patag was quoted to have said the company’s withdrawal from the Philippines "reflects badly on the business climate here as foreign investors cannot peacefully do business in the country."

The same industry source said management had been avoiding talks with newsmen in order not to preempt its plans. They refused to elaborate.

The storage tanks are located inside a nickel and refinery complex which was sold to Philnico by the Asset Privatization Trust (APT). However, the APT also signed a lease contract with Chemoil Asia to operate in the said complex.

Industry sources said Philnico wants the nickel mine while expressing interest in operating the tank farm.

Chemoil planned to transform the storage tank farm into a transshipment point for fuel oil in Asia. But the exclusive contract to store products at the tank farm for Pilipinas Shell Petroleum Corp. expired due to a government agency’s refusal to allow Chemoil to expand operations.

Without explaining why, the Philippine Ports Authority (PPA) allegedly refused to allow Chemoil to expand the Nonoc oil dock to be able to accommodate an 80,000-deadweight tons (DWT) vessel.

Chemoil Asia has business ties with Itochu Inc. of Japan, and Petrochemical Corp. of Asia-Pacific (Petrocorp.) and Chemphil, both under Antonio Garcia.

If Chemoil Asia pulls, out, it will be the first time a new player in the downstream oil industry will do so since the industry was deregulated more than two years ago. There are over 60 players since the oil industry was deregulated although it is still dominated by the three majors – Petron Corp., Caltex Philippines Inc., and Shell.