Petron transfer from Pandacan ahead of schedule

MANILA, Philippines—Petron Corp., the country’s biggest oil retailer and refiner, has spent P5 billion for the initial transfer of its petroleum product storage operations to various locations.

Ramon S. Ang, chairman and chief executive of Petron, said the spending allowed the oil company to transfer about 30 percent of its operations from the Pandacan oil depot in Manila to several logistics tank farms.

Ang added that Petron “is confident of finishing the transfer before 2015,” effectively ceasing the operations of its petroleum product storage facilities in Pandacan much earlier than the timeframe it originally committed.

Based on a filing before the Supreme Court, Petron committed to cease its Pandacan operations within five years or not later than 2016. San Miguel Corp., which owns 68 percent of Petron, filed the manifestation in November last year.

The oil company is expected to spend as much as $500 million (roughly P21.5 billion) to complete its relocation to five different sites in Luzon, including Batangas and Cavite. Petron was earlier reported to be looking at several other areas in Metro Manila for possible depot locations, including the Manila North Harbor.

Petron earlier said that it acquired a 35-percent stake in Manila North Harbor Port Inc., operator of the Manila North Harbor. Ang had said that parent firm San Miguel planned to initially earmark P20 billion for the facilities that it would put up within North Harbor, which included fuel tanks, grains terminal and bulk cement silo.

Ang also had assured the public that the relocation of its depot operations would not increase the prices of its fuel products. He explained that by transferring out of Pandacan, Petron’s costs would even decline because it would be able to source products in bulk.

Ang explained that in the area where Petron planned to transfer, cargo ships with capacities of about 20,000 tons could dock, unlike in the Pandacan area, which could accommodate ships with a capacity of 1,000 tons.

Petron and oil firm Pilipinas Shell and Chevron have been under pressure to move their depot operations out of Pandacan due to safety concerns raised by various cause-oriented groups and the Church since the area has now been surrounded by largely populated communities.