Petron eyes China, Vietnam for exports

Petron Corp., the country’s largest oil refiner, will expand its export business to include China and Vietnam in the list of its new markets for its lubricant and fuel additives, a top ranking company official said.

"We’re looking at Vietnam and we’re going to monitor the potential in China and other countries," Petron president Khalid Al-Faddagh said.

He said they will continue to break into other export markets this year as they intend to keep a steady share of exports income in the company’s bottom line.

"We are maintaining the percentage level of our exports," the oil firm official said.

The expansion of Petron’s potential export market, Al-Faddagh said, is being considered despite the slight slump its on exports business last year.

"The exports business did very well, despite the fact that with the sudden crash in oil prices in September – the sharp declines were not so good for us and obviously, exports becomes a penalty at that – as the margins are dropping so fast, and you just will have to move that inventory as quick as you can in order to compensate that with a lower cost," he said.

He said this, however, did not affect the company’s aggressive stance on developing further its exports business.

"We have established ourselves firmer into Cambodia in terms of volumes and presence with our partners there. I would say we’re much happier about the progress and we’re looking at moving into other countries as well," he said.

Early last year, Petron revealed that it had started exporting lubricants to Cambodia.

Al-Faddagh is also optimistic that the company’s recent decision to build a $2.5 million fuel additive blending plant in Subic by end-2007 would also boost its exports venture.

Petron recently entered into two new agreements with Innospec, Inc., the company’s fuel additive and technology partner since 1995.

The project, Petron said, is also consistent with the company’s strategy of developing non-traditional revenue sources and taking advantage of overseas market opportunities.

Innospec is a leading global fuel additives supplier whose products are used in Petron’s world-class fuels, namely Blaze, XCS Plus, Xtra Unleaded and DieselMax. These products have been widely acclaimed for their efficiency, power and environmental benefits.

Under the fuel additives blending agreement, Petron will construct and operate the blending plant in Subic that will serve the fuel additives requirements of Innospec’s customers in the Asia-Pacific region, including Petron.

The 10-year contract guarantees Petron that it will be Innospec’s exclusive toll blender in the region.

The blending plant will serve as Innospec’s supply hub in the Asia-Pacific region, as it positions itself to tap the fast growing regional market and bring its products and services closer to Asian customers. Traditionally, Innospec products used in the region have been sourced from Europe .

"This strategic partnership will produce numerous synergies since it fuses Petron’s technical services, marketing capability and strategic location with Innospec’s fuel additive technologies and strong presence in the Asian region," Al-Faddagh said.