OilEx worries Total more than peso fall

French firm Total Petroleum Philippines Corp. (TPPC) is more concerned with legislations that will affect the oil industry than the unstable political climate resulting in the deterioration of the peso.

"We are in constant discussion with our principals (in Paris) regarding the socio-political climate but we are more concerned with the legal framework than the foreign exchange situation," outgoing TPPC president Jean Jacques Jung said yesterday.

Jung was referring to the national oil exchange bill (OilEx) and the proposed 20 percent tariff on imported baseoil.

Incoming TPPC chief executive Jeffrey Neil Attwood said the company does not have a change of heart in its confidence on the Philippine economy.

"Our projections and plans for the next three years under our original five-year development program have not changed. There is no backing out," Attwood told newsmen.

Totalfina Elf, the mother unit of TPPC, has a presence in over 100 countries and the withdrawals have been few.

Jung said Totalfina Elf had withdrawn from Vietnam, Sudan and Madagascar. But the withdrawals were either due to nationalization policies of the host-state or regulatory policies that made investing in the country uneconomical.

The outgoing TPPC chief executive said the proposed OilEx is one example of legislative action that would be a major reason for their withdrawal from the Philippine market. "It will create an environment where the players have to source all their requirements from one entity which we believe cannot be competitive with our existing sources."

Likewise, the proposal to increase the import duty on baseoil products would increase the cost of selling baseoil byproducts like lubricants. – Ted Torres