Petron Corp., the country’s biggest oil refiner and retailer, has earmarked P51.9 billion for its consolidated capital expenditures this year to further strengthen its foothold in the local and Malaysian oil markets.
In a filing with the Philippine Stock Exchange, Petron disclosed that of the planned capital spending, 72 percent or P37.37 billion would be allocated for the implementation of the Refinery Master Plan 2 (RMP-2), which is aimed at upgrading the oil firm’s 180,000-barrel-per-day refinery in Limay, Bataan.
Another 13 percent or P6.75 billion will be used for the company’s cogeneration power plant project, which will generate 140 megawatts by 2014. The $500-million facility will serve the oil refinery’s current and expected future electricity and steam requirements and is expected to reduce the company’s refining costs.
Another 2 percent (P1.04 billion) will be allocated for retail service station network expansion in the Philippines; 1 percent (P519 million) for enhancing the facilities at the Port Dickson Refinery, and 3 percent (P1.56 billion) for the rebranding and refurbishing of Petron’s retail service station network in Malaysia.
Petron did not indicate where the remaining 9 percent would be spent.
According to Petron, the RMP-2 would involve further upgrades to the Limay refinery and the addition of new facilities to enhance operating efficiencies and capability to convert low-margin fuel oil into a broader range of white products and petrochemical products.
When completed in 2014, the Limay refinery will be able to produce pet coke, which may be used as fuel for the new cogeneration power plant for the refinery. It will also make Petron the only oil company in the Philippines capable of producing Euro IV-standard fuels, the global clean air standard.
Meanwhile, Petron expects to complete the first phase of its power plant (70 MW) within the first half of 2013 while the second phase, which will see the generation of another 70 MW, is expected to be completed in 2014.
The new cogeneration power plant, which is expected to cost P21 billion, will initially use coal as fuel and is expected to switch to pet coke once the Limay refinery starts petcoke production in 2014.
Petron said it intended to continue expanding its retail network in both urban and rural areas. It attributed the significant growth of its network to the fast expansion of its pioneering Petron Bulilit stations.
Petron is also set to invest P1.7 billion to enhance the facilities at the Port Dickson refinery in Malaysia and add new facilities to enable it to use heavier, more sour crude oil and produce Euro 4M-standard fuels.
The oil firm expects the Port Dickson Refinery to start producing Euro 4M-standard fuels by the second half of 2015.
Another P4 billion has been earmarked for the rebranding and refurbishing of 555 retail service stations in Malaysia under the Petron brand, which is targeted to be completed by 2014. A pilot scheme of rebranding and refurbishing 69 service stations was successfully completed on schedule last December.