Members of the Independent Philippine Petroleum Companies Association, or IPPCA, expressed interest Friday to bid for the 91 parcels of land that Philippine National Oil Co. may offer for lease if negotiations with Petron Corp. fail.
IPPCA executive director Paul Anthony Isla said in a statement PNOC might invite interested parties, including members of the association, to join the auction for the lots. No date was specified for the conduct of the bidding.
PNOC president Reuben Lista said the state-owned company had not issued an invitation to bid yet but was prepared to make one if negotiations with Petron on the extension of the lease agreement failed.
“But if negotiations with Petron fails, we have to be ready,” Lista said.
Isla said the move was a welcome development as “the 91 lots are currently leased to Petron under a long term contract that will expire soon, so this is really the best time for PNOC to bid out the properties.”
The Petron lease contracts for the PNOC properties will expire by August next year.
IPPCA is an organization of the country’s leading independent oil players, such as Clean Fuel, Eastern Petroleum, Filpride, Filoil, Flying V, Seaoil Philippines and Unioil Petroleum Philippines.
Petron is currently using 24 of the PNOC lots as sites for bulk fuel plants and 67 for gasoline stations. The properties have an area ranging from 321 square meters to almost 377,000 sq. m.
IPPCA said it received reliable information that the current Petron’s lease of the PNOC properties was far below the prevailing market rate, or grossly disadvantageous to the government.
“In fact, if PNOC considers other contractual arrangements like a joint venture, which should also be awarded through bidding, it may generate even more income as compared with a straightforward lease,” Isla said.
“Public bidding has been firmly established as the best way for government to get the most value from its assets at current market price, or even higher. With so much interest for its properties, PNOC will definitely get a better price from bidding out the lease to those lots rather than just renewing the contract with Petron,” Isla said.
He commended Lista and the current batch of PNOC board for taking bold steps to foster and promote healthier competition in order to bring greater benefits to the Filipino people as envisioned by the Oil Deregulation Law of 1998.
The law ushered the entry of small oil players to the country’s downstream oil industry.
“The PNOC recent decision is truly remarkable as it lives up to its mandate as a true champion of the Filipino people. We look forward to participating in the bidding of the PNOC properties. I am sure that IPPCA members will bid aggressively, resulting in optimal income for government in the process,” Isla said.