Petron operations unaffected by row with PNOC, says Ang
Petron Corp. yesterday assured the public of a steady supply of fuel even as the oil refiner remained locked in legal battle with its former parent, state firm Philippine National Oil Co., over assets that host vital facilities.
“So far, we continue to enjoy undisturbed possession of the leased properties that are vital to our operations, pending resolution of the issues we raised in court against PNOC and its president, so there is nothing to worry about,” Petron president Ramon S. Ang said in a statement.
The dispute between Petron and PNOC relates to leases of land that service stations and bulk plants are located, and which are expiring this month but are set to be renewed based on their existing agreement.
Petron, which accounts for about two-fifths of the country’s oil needs, operates a refinery in Bataan that processes 180,000 barrels of oil daily as well as 30 storage terminals and 2,400 filling stations across the country.
Last year, PNOC threatened to terminate the lease agreement and bid out the leases to other oil players unless Petron waived the contract’s provision on automatic renewal.
Petron went to court for what the company described as “a major breach of a binding and compulsory sale-leaseback contract.”
In an earlier interview, Ang said Petron since the 1930s owned and developed the lands that it was now leasing from PNOC.
He said that in 1993, during the course of Petron’s privatization, Petron had to convey its landholdings to PNOC to make way for a foreign partner, with the main condition that PNOC leases back the property to Petron over the long term.
“Otherwise, said properties should be returned to us,” he added. “We have invested billions of pesos in these properties and PNOC’s actions clearly weaken the country’s fuel supply security and the government’s thrust to develop key industries.”
Ang said the properties were transferred to PNOC at a book value of P150 million through a sale-and-lease-back agreement that provided for an “automatic renewal” of the contract upon expiry of the first 25-year term.
He added that since 1993, Petron had paid an average of about P140 million yearly, which as of end-2017 had totaled P3.4 billion.
