New oil players eye jt venture

The country's new players in the oil industry are proposing to form a joint venture company that will acquire and maintain storage facilities. To be composed of members of the New Petroleum Players Association (NPPA), the proposed joint undertaking will acquire or assume the contract of Coastal PTT to operate the Subic and Clark oil storage facilities. Or the same group can enter into an understanding wherein Coastal (also a member of the NPPA) could join in the joint venture.

"That will considerably lower our costs since storage costs account for over 10 percent of our total production expenses," one player told The STAR.

All the new players with the exception of Total Petroleum Philippines Corp. (TPPC) are without a storage facility and have resorted to sub-leasing storage facilities with costs ranging from P0.10 per liter to P0.14 per liter.

To remain competitive, new players price their petroleum products a few centavos lower than those of the three majors -- Petron Corp., Pilipinas Shell Petroleum Corp., and Caltex Philippines Inc.

"That way we can continue to retain the deregulated environment which has attracted a lot of domestic and foreign investors, and at the same time remain competitive versus the big players," they said.

The new players, which include Unioil Corp., Eastern Petroleum Corp., Sea-Oil Petroleum Corp., Flying V, and Rambi Development Corp., are not in favor of an oil exchange that is government-run.