Petron Corp. allots P5B for capex this year

Publicly-listed Petron Corp. is allocating some P5 billion for its capital expenditure this year. In a disclosure to the Philippine Stock Exchange, it said of the P5 billion capex this year, some P4.4 billion will be used for major capital projects and P583 million for miscellaneous projects. The major capital projects include the refinery expansion project of the oil firm. On the back of the success of the mixed xylene project, the company said it would also expand further into the petrochemical business. Total investment in the petrochemical-related activities is estimated at P3.2 billion. It said it has allotted about P319 million for a project which is geared towards protecting market share in the retail market. Petron said they have also set aside a portion of the capex this year for Tank Farm Relocation under the Joint Oil Companies Avfuel Storage Plant (JOCASP). “The development plans of the government for Ninoy Aquino International Airport (NAIA) requires the relocation of the JOCASP tank farm estimated at P260 million," it said. The company said it will allot fund for its ethanol program to be able to complete with the Biofuels Law. “In order to comply with the new law, installation facilities to enable the blending of ethanol into gasoline is necessary by 2007. Estimated cost of installation is P205 million," it said. This year, Petron, the country’s largest oil refiner, sees its net income to reach P5.7 billion in 2007. A company official, in an earlier interview with the STAR, said the projected improvement in income, presented during the recent Petron board meeting, would be driven by its aggressive expansion program. According to the official, who requested anonymity, the income assumption is also anchored on the oil firm’s continuing efforts to expand its operations abroad particularly its export business. In the company’s stockholders’ meeting, Petron president Khalid Al-Faddagh had said that they expect their income to hit the P10 billion mark by 2010. If Petron would be able to sustain its improved performance, the official said the earnings could reach P13.5 billion in five years time or by 2011. At present, Petron has the biggest service station network in the industry with more than 1,265 stations nationwide. To date, the company controls more than 34 percent of the highly competitive retail market. In industrial trade, Petron has about 47 percent of total volumes. Overall, Petron continued to dominate the market and posted a market share of over 39 percent. The oil firm also reported that its board has approved a $77.6 million budget for the Engineering, Procurement and Construction (EPC) of petrochemical project. As of August 2006, the Petro Fluidized Catalytic Cracker (PetroFCC) unit is over 30 percent complete. The PetroFCC will allow the company to produce more high-value while products and extract the petrochemical grade propylene. A BTX (benzene, toluene and xylene) unit which will produce aromatics and expand the company’s mixed xylene production capacity will also be constructed as part of its $300 million Refinery Master Plan. - GMANews.TV