Big 3 mull relocating oil depot to North Harbor

MANILA, Philippines - The three major oil giants — Petron Corp., Pilipinas Shell and Chevron Philippines — may maintain a single location at the Manila North Harbor to replace its facilities at the Pandacan oil depot.

San Miguel Corp. president and chief operating officer Ramon S. Ang said discussions are now ongoing among Shell, Petron and Chevron to relocate to the Manila North Harbor, whose offshore areas provide the ideal location for a tank farm that will replace the Pandacan oil depot.

Petron, controlled by the San Miguel-Ashmore Group, earlier expressed interest to invest in Manila North Harbor following San Miguel’s decision to build a new grains terminal through a partnership with the Romero family, which controls the company that was awarded a 25-year concession to operate and redevelop the country’s busiest domestic cargo port.

San Miguel is in the final stages of negotiations with the Romero family to invest in Manila North Harbour Port, Inc. The diversifying conglomerate plans to build a new grains terminal in North Harbor to service the needs of San Miguel’s food and beverage businesses.

Ang said San Miguel does not intend to be involved in the actual port operations as that remains the expertise and responsibility of the Romeros.

The Pandacan oil depot supplies around half of the country’s total fuel demand and 100 percent of lubricant requirements. Industry data shows that more than 1,800 retail stations in Regions I to IV, around 500 of which are in Metro Manila, get their fuel supply from the facility.

San Miguel in April initiated a tender offer on 884 million common shares held by the public in Petron or equivalent to 9.4 percent for P6.85 per share. Petron shareholders, however, sold just 184.7 million shares or equivalent to P 1.27 billion at the end of the tender offer in a block sale at the Philippine Stock Exchange.

San Miguel prior to the tender offer acquired 20 percent of Petron by exercising its option to buy 40 percent of the holdings of SEA Refinery Holdings BV for P 6.85 per share. Sea Refinery held about 50.1 percent of Petron.

 It paid $10 million early last year to acquire an exclusive option to buy into SEA Refinery, a unit of British investment firm Ashmore Group (ASHM.L).

The Ashmore Group, which holds a 40.5-percent stake in Petron through its wholly-owned unit SEA BV, has agreed not to participate in the tender offer.