By Sheldeen Joy Talavera, Reporter
SAUDI ARABIA’S Aramco is returning to the Philippine market because it is ready to amass a 25% equity stake in Unioil Petroleum Philippines, Inc.
In separate statements, the Saudi oil giant and Unioil said they signed a definitive agreement, which is subject to certain conditions including regulatory approvals.
No financial details of the transaction were provided.
“This investment represents one other step forward in our global technique to expand Aramco’s retail network, and we look ahead to introducing Aramco’s high-quality services and products to customers within the Philippines,” Yasser Mufti, Aramco’s executive vice-president of products and customers, said in a press release.
The deal comes 17 years after Aramco, widely considered the world’s largest oil producer, exited the Philippines after it sold its 40% stake in Petron Corp. In 1994, Aramco had invested in Petron when it was privatized by the Philippine government.
Aramco, the national oil company of Saudi Arabia, said in a press release that it goals to “capitalize on anticipated growth of the high-value fuels market within the Philippines.”
“It (the acquisition) represents further progress in Aramco’s strategic downstream expansion and growth of its global retail network, which goals to secure additional outlets for its refined products,” the corporate said.
Unioil, established by the Co family in 1966, is a diversified downstream fuels operator with 165 retail stations and 4 storage terminals within the Philippines.
“The strategic investment by Aramco is fully according to our ambition to be the fuel retailer of alternative and support our customers with top tier fuel solutions,” said Kenneth C. Pundanera, president of Unioil.
Janice Co Roxas-Chua, chief executive officer of Unioil, described the deal as “a significant milestone in Unioil’s 58-year history.”
“We’re confident that it will equip ourselves in accelerating our growth and development, further innovate, and strengthen our position as a frontrunner within the wholesale and retail fuels market,” she said.
As a part of the partnership, Unioil will introduce the Aramco’s brands and Valvoline-branded lubricants to Filipino consumers.
Asked to comment, Jayniel Carl S. Manuel, an equity trader at Seedbox Securities, Inc., said that Aramco’s global fame could also elevate Unioil’s market standing, encouraging local and international confidence in its brand and potentially boosting market share.
“By securing a direct link to one in every of the world’s largest oil producers, Unioil may profit from a more stable and cost-effective supply of crude and refined products, which might enhance its competitiveness in each the retail and industrial segments,” he said via Viber.
Mr. Manuel said that the “high-profile nature” of the investment signals that the Philippine downstream sector is a gorgeous environment for foreign investors, which can spur more international partnerships, heighten competition, and drive technological innovation.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said Aramco’s re-entry into the Philippine retail market would likely stimulate competition, encouraging existing players to innovate and improve their services.
“The entry of a world leader like Aramco could bring more attention to the Philippines’ fuel market, not directly benefiting local brands through heightened consumer and investor interest,” Mr. Arce said in a Viber message.
He said that the anticipated growth in infrastructure to support Aramco’s operations “may lower barriers to entry for other foreign investors, making a ripple effect.”
Juan Paolo E. Colet, managing director at China Bank Capital Corp., said that the entry of Aramco as a strategic investor will higher position Unioil for expansion and competition as a significant fuel retailer.
“Aramco’s return to the local petroleum market also demonstrates optimism and conviction concerning the economic prospects of the country,” he said in Viber message.
He added that the move could “invite other global oil players who don’t have any or limited domestic exposure to explore significant partnerships or investments within the Philippines.”
