Gov't may buy back Aramco's 40% in Petron

MANILA, Philippines- The Energy Department is thinking of buying another 40 percent in Petron Corp., the country's largest oil refiner, using royalties from the operation of its natural gas plant in Malampaya. Energy Secretary Angelo Reyes said the government, through the Philippine National Oil Co., is looking to acquire the 40-percent stake Aramco Overseas Co. will be selling. London's Ashmore group has made a $550-million offer for Aramco's Petron stake, which Aramco has expressed interest in, but PNOC, which currently owns another 40 percent in Petron, has a right to first match bid. “We still have 60 days to decide if we will exercise our right of first refusal or assign it to another buyer," Reyes said. “Some believe that it would be best to have an effective control of the government shares in Petron as it dominates the market 38 percent of retail market, thus making it a price setter which is crucial in a continuing high oil price regime," he added. The government will get billions of pesos as royalties for a period of 20 years from the $1.4 billion Malampaya deep water gas to power project. He said in case they would buy the Petron shares, they may tap the resources of other PNOC subsidiaries. Aramco's stake in Petron used to belong to PNOC, which sold it to the Saudi company in 1994. But Reyes clarified that nothing pertaining to PNOC's move on Petron has been finalized. “We are only studying all our options so we can assure the public that we have reviewed all these options. We can also assure them of transparency," he said. Reyes said they are also considering the engagement of a financial advisor if necessary. “We can hire financial advisor to study if we will have to invest and if we will invest, if we have funds to support such investments," he said. - GMANews.TV