The Philippine National Oil Company (PNOC) is in initial discussions with foreign firms for the targeted setting up of a “strategic reserve” that will act as the country’s oil reservoir in case of emergency.
According to a Manila Bulletin report, an Israeli firm confirmed that initial discussions have already been made with PNOC President Reuben S. Lista last month. Indonesian company PT Kaltimek expressed interest in the partnership and has been setting a meeting with PNOC officials. The state-run company has also been in discussions with Dubai-headquartered Lloyds Energy on prospective investments on Liquefied Natural Gas (LNG) as well as ventures in the downstream oil sector.
After the September drone attack on the oil facilities in Saudi that rattled the market, PNOC had been tasked by the Department of Energy (DOE) to conduct a feasibility study on the proposed oil stockpile, including the possibility of setting up a floating oil storage facility in the country.
According to the report, PNOC expressed that it will likely complete the study by the end of the year or early next year and it will only be known at that time how the planned oil stockpile will be designed and implemented; but as initially sounded off to the Senate committee on energy, the “strategic reserve” can start off with a floating storage then a possible onshore stockpile facility over the longer term.
The government-owned company as well as its subsidiary, PNOC-Exploration Corporation (PNOC-EC), had been targeting to import diesel since last year, but questions on storage and distribution networks hobbled the venture.
There is no clear direction as to how the government will carry out the plan, especially since the proposal of the legislative is just for the Philippines to have “oil diplomacy arrangements” with ally-countries and not necessarily to set up a physical storage facility, which was said to be fundamentally different from the plan PNOC and DOE had espoused; thus, it was worth monitoring how the entire investment trajectory will eventually shape up.