Petron Corp., the country’s largest oil refiner, needs roughly $1.5 billion in additional investments to complete its petrochemical plant project, a top company official said.
Petron chairman Nicasio Alcantara told a press conference that the investment would be financed through equity and borrowings.
He said the entry of a new partner in Petron, investment fund Ashmore Group, is seen as an added boost to the expansion initiatives of the oil firm.
“This is a positive development. This is viewed as a win-win situation. Being a known investment fund, Ashmore could well support our efforts to continue our diversification and investment in other related business such as in petrochemical. It is a performance-based asset management fund, they always look at opportunities,” Alcantara said.
“We believe that they (Ashmore) could put in more money and thus will help improve the profitability of the company. This is a change for the better. We always believe that there is always room to improve our operations,” he added.
SEA Refinery Holdings, a unit of Ashmore Group, one of the world’s largest investment funds, offered last week to acquire the 40 percent stake of Saudi Aramco in Petron for $550 million.
The Petron executive also pointed out that despite the expected changes in the company’s structural ownership by June or July this year, the company would continue to push through with its five-year expansion program.
He said he is also optimistic that the transaction will not in any way affect the oil firm’s bottom line this year. “We only have a change in ownership. We are a strong organization.”
On supply concerns, Alcantara said Saudi Aramco remains committed to maintain Petron as its market.
Alcantara said the additional investments would specifically cover the second phase of its 140,000-metric ton (MT) petrochemical fluidized catalytic cracker (PetroFCC) project after completing the initial stage by this quarter.
The PetroFCC project would enable the company to increase its yield of higher-value white products such as gasoline, diesel and liquefied petroleum gas (LPG).
The diversification into petrochemical products, Alcantara said, will be crucial in further improving the company’s income in the near-term.
Alcantara added that petrochemicals also command better regional and local prices than other petroleum products.
The capital would also support Petron’s plan to put up a petrocoke project which 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 FCC project is part of the company’s 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 the petrochemicals benzene and toluene and the expansion of its existing mixed xylene production capacity.