San Miguel Corp. to upgrade offshore oil refinery bought from Exxon Mobil in Malaysia
MANILA, Philippines—Energy-based conglomerate San Miguel Corp. plans to upgrade the capacity of a newly acquired offshore oil refinery following a $610-million deal to acquire the downstream petroleum businesses of American oil and gas multinational giant Exxon Mobil Corp. in Malaysia.
The deal is also widely expected by analysts to result in the integration of the newly acquired offshore oil businesses with SMC’s majority-owned Petron Corp., the largest oil refiner and distributor in the Philippines. Both SMC and Petron traded higher on the local stock exchange after the announcement of the deal Wednesday night.
SMC is acquiring three subsidiaries comprising Exxon Mobil’s downstream oil business in Malaysia: Esso Malaysia Bhd (EMB), a publicly traded company of which Exxon Mobil owns a 65 percent stake as well as wholly-owned ExxonMobil Malaysia SdnBhd (EMMSB), and Exxon Mobil Borneo SdnBhd (EMBSB).
The three subsidiaries form an integrated business engaged in the refining, distribution and marketing of petroleum products. Physical assets include the Port Dickson refinery with a rated capacity of 88,000 barrels per day; seven fuel distribution terminals; and a network of roughly 560 branded service stations, 420 of which are company-owned.
“Exxon Mobil’s Malaysian downstream business is attractive to San Miguel given that there is plenty of room to move up the value chain by upgrading refinery capabilities,” said SMC president and chief operating officer Ramon S. Ang. “Our plan would be to upgrade the Port Dickson refinery so that it can make use of a wider variety of crudes, and produce higher-value products,” Ang added.
Ang further said SMC would continue to uphold world-class product quality, safety and environmental standards. “This acquisition provides us with a unique opportunity to expand our participation in the regional oil and gas sector, and we will focus our efforts not just on upgrading refinery capabilities, but expanding reach into underserved areas in the fuels market.”
US-based Exxon Mobil Corp. has been operating in the Malaysian market for about a century. The sale is seen allowing the company to henceforth focus on other businesses in Malaysia like exploration, chemicals, lubricants, and global business support.
“We are committed to investing in the business, and providing the best products and services to Malaysian consumers,” Ang said.
Through subsidiary Petron Corporation, San Miguel is the largest integrated oil refining and marketing company in the Philippines with a crude distillation capacity of 180,000 barrels per day. Petron operates a network of over 1,700 service stations in the Philippines and is presently undertaking a major upgrade of its refinery that will allow full conversion of the fuel oil production to higher-value products such as gasoline, diesel, and petrochemicals.
