Petron clears P2.7B in 1st semester

Publicly-listed oil refiner Petron Corp.  reported a slight increase in its first half income  to P2.7 billion from P2.69 billion in the same period a year earlier.

In his report at the company’s stockholders meeting, Petron president Khalid Al-Faddagh said lower expenses and the continued implementation of aggressive marketing strategies during the period helped the company stabilize its income stream.

To further enhance earnings, Al-Faddagh said the company is also planning to push through with the second phase of its 140,000-metric ton (MT) petrochemical fluidized catalytic cracker (PetroFCC) project after completing the initial stage by the first quarter of 2008.

The PetroFCC project, which is 81-percent complete as of end-June this year, would enable the company to increase its yield of higher-value white products such as gasoline, diesel and liquefied petroleum gas (LPG).

According to the Petron chairman Nicasio Alcantara, the diversification into production of petrochemical products will be crucial in improving further the company’s income in the near-term.

“We will soon reap the rewards of our diversification into petrochemicals. As the local oil industry matures, this initiative will give us new revenue streams and raise Petron’s level of profitability in the coming years,” Alcantara said.

He pointed out that  petrochemicals also command better regional and local prices than other petroleum products.

The second phase of the PetroFCC project, Alcantara said, will be twice the size of the first phase and may command similar investments of more than $150 million.

As part of the five-year refinery plan of Petron, he said they would also be revisiting plans to put up the $1.2- billion petrocoke project in Bataan.

The petrocoke project will involve the modification of low-priced black residue products to high-value light products by applying the so-called hydrocracking method and using delayed coking process.

The PetroFCC project is part of the company’s $300-million refinery master plan over the next three years that will allow it to extract petrochemicals for both the local and regional markets.

The plan also includes additional refinery units for the extraction of  petrochemicals benzene and toluene, and the expansion of its existing mixed xylene production capacity.

For the second quarter of 2007, Petron posted a four percent increase in its net income to P1.75 billion as against P1.68 billion in the comparative period in 2006.