Petron earmarks P11b to finance ongoing projects

Petron Corp., the country’s largest oil company, is looking at capital expenditures of P11.048 billion this year to fund ongoing projects.

“These capital expenditures are expected to be funded by a combination of internal cash generation and external financing sources,” Petron said in its final offering circular submitted to the Philippine Stock Exchange.

Petron will issue $550 million senior perpetual capital securities as part of its capital raising program.

Petron said in a disclosure to the stock exchange it planned to issue the securities on April 19 with net proceeds estimated at $547.8 million.

The company plans to use the proceeds “for the repayment of indebtedness and for general corporate purposes.”

Petron’s capex this year is slightly higher than its 2020 capex of P8.480 billion, which were mainly expenditures for refinery, depot and service stations

Petron made significant capital expenditures over the past year to maintain and upgrade its 180,000-barrel-per-day Bataan refinery, expand its retail service station network in the Philippines and upgrade its service stations in Malaysia.

The company is also constructing a new power plant to replace its old generators at the refinery and generate incremental power as refinery fuel will be converted into high-value products. Construction is expected to be completed by the second half next year.

Petron said the anticipated capital expenditures were based on management’s estimates and might change as projects would be reviewed.

Petron had a network of about 2,435 retail service stations in the Philippines as of end-December.

About 34 percent of the Petron’s service stations are company-owned-dealer-operated, while 66 percent are dealer-owned-dealer-operated.

“To support growing fuel demand in the Philippines, the company will continue to build service stations in high-growth or high-volume sites,” Petron said.

The company’s liquefied petroleum gas distribution network includes about 1,117 branch stores. It also has 44 car care centers.

“The company believes that the downstream oil market in the Philippines and Malaysia are still underserved and have strong potential for growth,” Petron said.

Topics: Petron Corp. , capital expenditures , capex
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