Petron Corp. eyes TRO versus PNOC for “breach of contract”

Petron Corporation is looking to refinance it’s $750 million securities on the stock exchange of Hong Kong Limited.

Listed oil company Petron Corporation has taken the Philippine National Oil Company (PNOC) to court for “breach of a binding and compulsory sale-leaseback” contracts.

Petron has asked for a temporary restraining order to stop the PNOC “from performing acts aimed at ousting Petron of its leased properties.

The company added that the actions of the state-run firm threaten its operations, shareholders, and the economy.

“If PNOC will continue to disregard its reciprocal obligations on the conveyance of our land, then they should return the properties to us. Petron has invested billions of dollars on these properties. PNOC’s actions clearly jeopardizes the country’s fuel supply security and government’s thrust to develop key industries,” Petron said.

Petron offered to negotiate the agreement in 2016 but was constrained to seek judicial intervention when PNOC president Reuben Lista said that it will terminate the lease agreement with Petron, saying that there were provisions in the contract that seem disadvantageous to the government.

In the case filed by Petron at the Mandaluyong regional trial court (RTC), it cited two letters from Lista saying “to nullify certain provisions of the lease agreements that pose a stumbling block before we can proceed to negotiate the renewal.”

Also, Lista called in the letters for the abandonment and cleanup of the contested sites on or before the expiration of the lease.

Meanwhile, a report by Rappler said that the Department of Energy has formed a negotiating team to resolve the rental issue in a “win-win solution.”

“The board appointed a negotiating team. It is composed of 3 directors and I think another 3 from the management side,” DOE secretary Alfonso Cusi said.

Cusi is also the chairman of PNOC.

Petron has existing lease agreements with the PNOC for the sites of its $3-billion refinery in Bataan, 24 bulk plants, and 67 gasoline stations.

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