The Department of Energy (DOE) expects to formally invite Japan and the Kingdom of Saudi Arabia within the year to invest in overseas fuel storage facilities in Bataan, an initiative aimed at strengthening the Philippines’ energy security while positioning the country as a regional fuel distribution hub.
“We hope to formalize the offer within the year,” Michael O. Sinocruz, director of the DOE’s Energy Policy and Planning Bureau, told reporters on the sidelines of the 2nd Stakeholders Summit of the United Portusers Confederation of the Philippines.
Sinocruz said the proposed facilities would allow Japan and Saudi Arabia to store petroleum products in the Philippines for regional distribution while providing the country with greater supply security as a net importer of oil.
The project may be pursued through government-to-government negotiations, he said.
For Saudi Arabia, the arrangement could involve a partnership between the Philippine National Oil Company (PNOC) and a Saudi government entity, most likely, Saudi Aramco.
Aramco was previously a shareholder in Petron Corp., the country’s largest oil refiner. It acquired a 40 percent stake in the company in 1994 before selling its entire interest to London-based Ashmore Group in 2008. San Miguel Corp. subsequently acquired majority control of Petron in 2010 and later consolidated full ownership. Petron has an oil refinery in Bataan.
For Japan, Sincocruz said the DOE is prioritizing the establishment of a Strategic Petroleum Reserve (SPR), with the Japan International Cooperation Agency (JICA) currently commissioning a feasibility study for the project.
Sinocruz said discussions with Japan are at a more advanced stage because of the ongoing feasibility study, although the DOE intends to formally present investment proposals to both Japan and Saudi Arabia before the end of the year.
The proposed overseas fuel storage facilities form part of the government’s broader strategy to diversify fuel supply sources, improve energy resilience, and enhance the Philippines’ role in the regional petroleum supply chain.
