Small oil firms group plans IPO

Enerfuse Holdings Inc., the newly-formed investment vehicle of four small oil firms, plans to undertake an initial public offering (IPO) in the near term to support its capital expansion programs.

Enerfuse consists of equal shareholdings by Eastern Petroleum, Seaoil Philippines, Flying V and Unioil Philippines.

Eastern Petroleum Corp. chairman Fernando L. Martinez told reporters Wednesday that the listing of Enerfuse’s shares in the Philippine Stock Exchange (PSE) is part of the overall strategy to expand the holding firm’s exposure in the oil industry.

Industry sources said the group is also eyeing to venture into several projects not only in the oil sector but also in the power industry.

"We are looking at doing an IPO within a three-year period. For now, we are already putting in resources for our projects," Martinez said.

The holding firm owns 50 percent of Bioenergy8 Corp., another new entity which will build a P50-million biodiesel manufacturing plant in Davao.

Martinez said as part of the expansion plan of the consortium, they are also planning to construct an ethanol refinery with production capacity of one million tons a day.

He said the group may also be venturing into the shipping business by acquiring three double-hulled cargo vessels in the coming months.

For his part, Energy Secretary Raphael P.M. Lotilla has lauded Bioenergy8’s initiative to help spur the development of the biofuels industry in the Philippines.

"This new biodiesel plant is a welcome development in our quest to attain energy security and self sufficiency for the country through the utilization of locally-produced biofuels," Lotilla said.

The energy chief said he is hoping other local players would increase their biofuels production in the country.

He said he also expects the Philippines to eventually supply biofuels in the regional and global markets following the signing of the Biofuels Act of 2006.

The biofuels law mandates a nationwide minimum one percent biodiesel blend in all diesel-fed engines within three months from its the effectivity.

Estimates from the energy department show that the use of one percent biodiesel and five percent bioethanol this year will result in foreign exchange savings for the country of about $167 million annually.

In 2010, the use of 10 percent bioethanol and two percent biodiesel will result in annual foreign exchange savings of about $389 million.