More oil traders may see the Philippines as attractive if Petron’s Bataan refinery, the country’s first one to be built and the last one standing, closes indeed, according to an oil executive.
Raymond Zorrilla, Senior Vice President for External Affairs of Phoenix Petroleum — the country’s third-largest oil player — said in a report by BusinessWorld that the absence of refineries may not only be a come-on for more oil traders, but can also trigger competition between oil importers.
Petron President and CEO Ramon Ang had earlier indicated that the oil giant’s 180,000-barrel per day (bpd) refinery in Limay, Bataan would close “very soon” due to taxation issues amid the COVID-19 pandemic.
Meanwhile, Shell — the country’s second-biggest oil firm — permanently shut down its 110,000-bpd refinery in Batangas City last August as part of its business sustainability measures. Global market ratings firm Fitch had warned of high inflation in oil prices resulting from the said closure.
Zorrilla added that the government must invest in strategic stockpiling of oil products, as well as encourage more investments in local oil and gas exploration to quell fears over the country’s fuel security stemming from uncertainties in the world market. Phoenix’s mother firm Udenna Group purchased 45% of the Malampaya gas-to-power project previously held by Chevron and is one of three groups vying for the other 45% being sold by Shell.
Ang, however, said that stockpiling is not possible without the presence of local refineries that provide for the reprocessing of gasoline and diesel imports.
The DOE, however, doesn’t see any immediate threat to the Philippines’ fuel security if oil refining in the country comes to a halt.
Photo from San Miguel Corporation website.