Petron mulls another overseas acquisition

MANILA, Philippines - Petron Corp. is taking a page from its 2012 purchase of ExxonMobil’s downstream oil business in Malaysia as it gears up for another potential overseas acquisition.

Petron chairman and chief executive officer Ramon S. Ang said yesterday they have set their sights on a possible overseas acquisition of a company that has similarities in business operations with Esso Malaysia Berhad.

“Yes, there is an overseas opportunity that we are currently looking into. We are eyeing a possible acquisition,” he said.

Ang said Petron is taking careful steps with the acquisition as it may entail several issues.

“The opportunity Petron is looking into is something like that of Malaysia (Esso Malaysia Berhad), which we bought already having a refinery, a tank farm, and gas stations,” Ang said.

“That is the type of investment which Petron is eyeing but we are careful because usually oil refineries or tank farms have many issues like leaks that can cause high clean-up costs,” he added.

Petron’s Malaysian unit in 2012 completed its nearly $600-million acquisition of Esso Malaysia Berhad and its two subsidiaries, ExxonMobil Malaysia Sdn Bhd and ExxonMobil Borneo Sdn Bhd.

Now known as Petron Malaysia, Esso Malaysia Berhad’s operations included a refinery located in Port Dickson on the west coast with a capacity of 88,000 barrels per day, seven fuel distribution terminals, and a network of about 560 retail stations.

Following its acquisition, the company immediately opened its first Petron-branded service stations in the country as part of the its rebranding program aimed at converting some 560 Esso and Mobil stations to the Petron brand.

Meanwhile, Petron successfully listed 10 million preferred shares worth P10 billion in the Philippine Stock Exchange yesterday.

With the issue oversubscribed, the offer size of P7 billion was increased by another P3 billion to reach a total of P10 billion.

“The strong response to our offering signals the trust and confidence of the investment community in the growth prospects of the company and its viability over the long-term,” Ang said.

The Series 2A preferred shares hold a fixed dividend rate of 6.3 percent per annum while the Series 2B is at 6.8583 percent per year.

Petron said it intends to use the proceeds of the offering to redeem the P10 billion preferred shares it issued in 2010.

“The solid support we received from investors bodes well for the company at a time when we are already commissioning our biggest and most ambitious project to date,” Ang said.

Petron recently completed its $2-billion RMP-2 project slated for full commercial operations by early 2015. The oil giant said it has begun starting up major units last September.

Once fully operational, the project will allow Petron to fully utilize its 180,000 barrels-per-day refinery in Limay, Bataan, increase its production of higher value white products such as gasoline, diesel, LPG, and petrochemicals, and produce Euro-4 standard fuels.

The country’s largest oil retailer and refiner as of end-June has close to 2,200 stations nationwide and continues to own the biggest market share among all oil players as of end-2013 with 36.5 percent.