Senator asks: Who will profit from Petron sale?
By Gil C. Cabacungan Jr.
Philippine Daily Inquirer
First Posted 05:58:00 04/30/2008
MANILA, Philippines--Senator Miriam Defensor Santiago has a load of sharp questions on the announced sale of Saudi Aramco’s 40-percent share in Philippine oil refiner and retailer Petron Corp.
The government’s Philippine National Oil Co., which holds another 40 percent of Petron, has until May 12 to exercise its right of first refusal is studying its next move.
“Why was this matter not ventilated earlier so that we could have discussed it in Congress?” said Santiago, chairperson of the Senate energy committee, in an interview with the Philippine Daily Inquirer. “We could have had more time to study the government’s options.”
“Is there anybody or any person making money from this deal? Let me put it frankly, who is the middleman or the broker who is going to earn hundreds of millions of dollars from this deal?”
The sale of Aramco’s 40-percent share to the London-listed portfolio investor Ashmore Group, announced last month, caught the Philippine market by surprise, not only because of the sudden withdrawal of the Saudi oil giant but also because of the circumstances of the sale—Aramco’s shares were not sold at a premium on the market. Also, the government is apparently waiving its right to match the offer of Ashmore.
Former trade minister Roberto Ongpin reportedly negotiated the $550-million sale of Aramco’s share to the Ashmore group. It is widely speculated that the group may flip the Petron shares to another buyer.
Several senators are urging the government to buy back the Petron shares or seek another strategic partner.
Santiago said Finance Secretary Margarito Teves had stated that the government could raise the necessary amount to bankroll the purchase of Aramco’s shares but “government wants to spend its surplus money for other priorities.”
Santiago said regaining control of Petron should be the biggest priority.
“The best option is still to buy back the shares of Armaco,” she said. “All developing countries have progressed more than others mainly because of national oil refineries. Petron should be run as a national-interest company just like the National Food Authority and not as a commercial-interest company.”
Santiago also noted that the government might not have enough time to match Ashmore’s offer in view of the fast-approaching deadline. Under the shareholder’s agreement, the government has 60 days from the transfer notice, or until 12 May 2008, to decide whether to exercise its right of first offer to buy.
Santiago said another major concern in the divestment of Aramco was the Philippines’ access to crude oil supply. She said that although Aramco had verbally committed to continue to supply oil to Petron, it was possible that the Saudi oil giant would cut short its 1994 crude oil supply agreement, which will end in 2014.
“To protect our crude oil supply, the government should not waive its right to first option to buy, until it has renegotiated the crude oil supply agreement,” Santiago said. “Aramco should surrender its present right to preterminate the agreement.”
It has been reported that the Department of Energy had long known about Aramco’s plan to divest its Philippine investments. Negotiations with local business groups had also reportedly been made before the Ashmore deal was closed. With editing by INQUIRER.net
|
