SMC plans to invest $1.2B in Exxon Mobil Malaysia

MANILA, Philippines - San Miguel Corp. (SMC) plans to invest up to $1.2 billion to upgrade the refinery of its recently acquired Exxon Mobil Malaysia, as well as expand its service station network in Malaysia.

This was revealed yesterday by Petron president Eric Recto who said that SMC plans to invest an additional $200 million to expand Exxon Mobil Malaysia’s service station network in Malaysia.

The $200 million is on top of an earlier announced $800 million to $1-billion allocation for the upgrade of the Malaysian refinery.

According to Recto, SMC is still studying how it will finance the $1.2 billion. He said SMC is looking at a combination of equity and borrowing – either through bank financing or some other debt instrument.

Recto said plans are also in place for the expansion of Petron’s service station network here in the Philippines, particularly in the provinces. He would not say how many additional stations would be put up.

SMC announced last month that it had acquired the downstream petroleum businesses of American multinational oil and gas company Exxon Mobil Corp.

The three companies acquired by SMC are Esso Malaysia Bhd (EMB), a publicly traded company of which Exxon Mobil owns a 65-percent stake; wholly-owned ExxonMobil Malaysia Sdn Bhd (EMMSB), and Exxon Mobil Borneo Sdn Bhd (EMBSB).

The three subsidiaries form an integrated business engaged in the refining, distribution and marketing of petroleum products.

The assets of Exxon Mobil Malaysia include the Port Dickson refinery with a rated capacity of 88,000 barrels per day; seven fuel distribution terminals and a network of roughly 560 branded service stations, 420 of which are company-owned.

In an interview with reporters, Recto said SMC would operate Exxon Mobil Malaysia separately from Petron. He said Exxon Mobil Malaysia would service solely the Malaysian market.

The synergy with Petron would only be in terms of purchasing of crude oil supplies for both Exxon and Petron, he added.