PETRON CORP., the country?s biggest oil refiner and retailer, plans to invest $1.6 billion to upgrade its 180,000-barrel-a-day refinery and petrochemical business in Bataan, a move seen to provide additional revenue streams to the oil company.

Petron chair and CEO Ramon S. Ang said that with the investment, the company could generate P800 million in revenues a year.

Initially, however, Petron targets to invest $1 billion for the Phase II upgrade.

Petron is already in talks with foreign investors to put some $1 billion (roughly P46 billion) in the oil company. This, he said, was the reason why the company?s board of directors decided to increase the number of directors to 15 from the current 10.

He said Petron was willing to offer a 40-percent stake to these investors through the issuance of new shares.

Petron President Eric Recto further disclosed that PTT of Thailand is among those investors willing to invest $1 billion for the facility.

Meanwhile, Ang also reported that Petron has acquired a 40-percent stake in Petroechemical Asia (HK) Ltd., owner of Philippine Propylene Inc. (PPI), with an option to increase its stake up to 51 percent. PPI owns a polypropylene plant in Mariveles, Bataan, which has a capacity to produce 160,000 metric tons to 225,000 MT of polypropylene annually.

Ang said the move was part of the company?s strategy to diversify into the petrochemicals business and further add revenue streams to the company.

The raw material to be used in the polypropylene plant will come from Petron?s refinery, which, in the meantime, can produce 140,000 MT of propylene a year. With its acquisition of the plant, Petron will have its share of the incremental value derived from converting propylene into polypropylene resin.

Polypropylene is a thermoplastic polymer used in a wide variety of applications, including food packaging, rope, sacks, plastic parts and reusable containers. At current international prices, polypropylene is about $200 a ton, more valuable than propylene, which is valued at only $40 a ton.

?This strategic acquisition gives us a unique opportunity to further integrate our petrochemicals business and substantially add to our bottom line. It likewise gives us an excellent platform for future growth into this high-margin industry over the long-term,? Ang said.

In a related development, PPI has entered into a technical services agreement during the rehabilitation, commissioning and start-up of the polypropylene plant with Integrated Refinery and Petrochemical Co., an affiliate of PTT Public Co. Ltd. of Thailand.