MANILA, Philippines – Competition in the Philippines’ petroleum industry is heating up.
After 17 years, Saudi oil giant Aramco is reentering the Philippine market as an investor after signing a deal to acquire a 25% stake in Unioil Petroleum Philippines (Unioil), a move that could eat into the markets of leading oil firm Petron Corporation, second biggest Shell Pilipinas Corporation, and other players in the industry.
The publicly listed firm owned by the Saudi Arabian government disclosed on February 19, Wednesday that the investment “aims to capitalize on anticipated growth of the high-value fuels market in the Philippines.”
In addition, Aramco said the move “represents further progress in Aramco’s strategic downstream expansion and growth of its global retail network, which aims to secure additional outlets for its refined products.”
Unioil, established in 1966 by the Chinese-Filipino Co family, is one of the Philippines’ diversified downstream players. It has a network of 165 retail stations and four storage terminals. In contrast, Petron has 2,400 service stations nationwide and 30 storage terminals.
Unioil started in lubricants manufacturing and distribution. When the Philippines’ oil industry was deregulated in 1998, Unioil ventured in fuel trading, distribution, and retailing.
In a statement, Unioil said that with Aramco’s investment, it will be introducing the Aramco and Valvoline brands to Filipino consumers in its retail outlets.
“We are delighted with this new partnership with Aramco, which represents a major milestone in Unioil’s 58 years history. We are confident that this will equip ourselves in accelerating our growth and development, further innovate, and strengthen our position as a leader in the wholesale and retail fuels market,” said Janice Co Roxas-Chua, CEO of Unioil.
Kenneth Pundanera, president of Unioil, said “the strategic investment by Aramco is fully in line with our ambition to be the fuel retailer of choice and support our customers with top tier fuel solutions.”
Roxas-Chua signed the deal for Unioil while Armaco Asia Singapore Managing Director Fai Aldossary signed on behalf of the Saudi oil firm.
Yasser Mufti, Aramco executive vice president of products and customers, said the investment “represents another step forward in our global strategy to expand Aramco’s retail network, and we look forward to introducing Aramco’s high-quality products and services to customers in the Philippines.”
“Our international expansion aims to capture additional value and enhance our participation in vibrant economies, in collaboration with established partners. We are delighted to embark on the next stage of this journey with Unioil, a dynamic player in the fast-growing Philippines fuels market,” Mufti said.
Aramco’s investment in Unioil is subject to closing conditions and regulatory approvals.
Saudi Aramco’s first investment in the Philippines was in 1994 or over 30 years ago when it signed with Philippine National Oil Company (PNOC) a stock purchase agreement that gave Aramco a 40% stake in Petron, the Philippines’ largest oil company. Aramco sold its stake to investment fund Ashmore Group in 2008 or 14 years later for $550 million.
Petron is now part of the San Miguel Group under tycoon Ramon Ang. San Miguel Corporation has a 68% stake in Petron. Saudi Aramco is one of the major suppliers of crude oil for Petron. – Rappler.com