Petron spent P24B in 2011 on expansion

Petron Corp., the country’s biggest oil refiner and retailer, spent P24 billion last year to expand and beef up its operations amid tightening competition.

In a filing, Petron said that in the local downstream oil sector, the competition has shifted to the growing “new player” sector from the oil majors, which also include Pilipinas Shell Petroleum Corp. and Chevron Philippines.

“Deregulation saw the entry of more than 90 other industry players, rendering the petroleum business more competitive,” Petron said.

As of end 2011, Petron remained the industry leader with nearly 38 percent of the total market.

The company led in all major segments including retail, industrial and LPG. Petron also passed its closest competitor and became the leader in the lubricants segment.

Of the P24-billion capex budget last year, the lion’s share of P18.2 billion was used for refinery projects such as the $1.8-billion Refinery Expansion Project (RMP-2), which will see the upgrade of the company’s 180,000-barrel-a day oil refinery in Bataan; the construction of the 140-megawatt power plant; and other efficiency- and maintenance-related projects.

Another P3.7 billion was allotted for the expansion of its retail service station network to increase market share and the installation of the LPG supply and distribution facility.

Another P1.4 billion was used to improve cost efficiencies and revenue generation, which included the purchase of additional equipment and tanks, expansion of existing facilities and implementation of safety-related projects.