Wednesday, September 19, 2018

Petron president urges PNOC to honor property lease deal

By: - Reporter / @daxinq
/ 09:58 PM September 24, 2017

Ramon S. Ang, president of Petron (File photo by LEO M. SABANGAN II / Philippine Daily Inquirer)

Petron Corp. has asked the state-run Philippine National Oil Corp. (PNOC) to honor the terms of a long-standing property lease – a deal drawn up by the government itself – amid a move by the agency’s new head to raise the rent to be paid by the country’s largest petroleum firm.

Ramon Ang, Petron president, made the call for PNOC to stick to the terms of its own lease agreement after Ruben Lista, PNOC president, said that the government firm, under whose name many of Petron’s properties are lodged, would want to “renegotiate” the contract ahead of its expiration in August 2018.


Ang – who also heads the country’s largest conglomerate San Miguel Corp. – pointed out that Petron’s lease with PNOC provided for an “automatic renewal” of the contract with the state firm over an aggregate land area of 200 hectares covering separate properties on which the petroleum giant built its Bataan oil refinery, oil depots and various gasoline stations.

“If they don’t want to honor that [contract], they can make the move to settle [the dispute] by arbitration,” Ang said, referring to the provisions of the deal. “We don’t need to do anything. [The agreement is] covered by an automatic renewal [provision].”

The property deal between Petron and PNOC stemmed from the former’s privatization in the 1990s when its real estate assets were transferred to its then-parent firm PNOC for a nominal fee of P2 million.

The agreement allowed half of Petron’s shares to be sold to petroleum giant Saudi Aramco, which, as a foreign entity, was prohibited by law from owning real estate in the country.

In exchange for its P2 million investment, PNOC would earn fees from the long-term lease on the properties lodged under its name.

The automatic lease renewal provision was included in the deal by the government itself as an assurance to Saudi Aramco and future foreign and local investors ahead of the firm’s 1994 initial public offering that Petron’s operations would be unhampered by the government’s privatization move.

Nonetheless, Ang said Petron was “open and willing” to sit down with PNOC to discuss the issue as well as any proposals that would emerge to settle the issue.

Any changes that PNOC wants to propose on the terms of the lease agreement “should be put in writing” and backed up officially by a resolution from its board of directors, he said.



Read Next
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: PNOC-Petron property lease deal, Ramon Ang, Ruben Lilsta
For feedback, complaints, or inquiries, contact us.

Canada opioid deaths hits 8,000

September 19, 2018 07:43 AM


Sex with Trump ‘least impressive’ for Stormy Daniels

September 19, 2018 07:02 AM


All-time low ratings for ‘lackluster’ Emmys

September 19, 2018 06:50 AM


China imposes retaliatory tariffs on $60bn in US goods

September 19, 2018 06:42 AM

© Copyright 1997-2018 | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.