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TWO
senators want the Arroyo administration to buy back the
40-percent Petron shares that Saudi Aramco is selling to
the Ashmore Group, a London-based investment firm, in
order to regain the government’s leverage in the local
oil industry amid skyrocketing prices of petroleum
products.
Sen.
Miriam Defensor Santiago, who chairs the Senate energy
committee, suggested at a public hearing Thursday that
if the administration could raise $550 million (P22.5
billion), it would be better to buy back the 40-percent
Petron shares rather than sell these to another foreign
company.
“With
oil prices shooting straight up off the computer screen,
keeping Petron as a wholly owned government corporation
would assure stability and a reasonable increase in the
prices of oil in the local market. It should serve
national rather than commercial interests,” she said.
In the
same hearing, Sen. Juan Ponce Enrile proposed that if
the Department of Finance could not raise the P23
billion to buy back the Aramco shares, the government
should just unload its entire stake in Petron and
Congress could enact a law to regulate the entire
industry.
Finance
Secretary Margarito Teves admitted to the senators,
however, that it would be “extremely difficult” to raise
the money given the tight budget situation.
“Theoretically, we can buy back [the Petron shares of
Aramco] but it would be extremely expensive for us,”
Teves said even as he assured the senators he would
study the proposal.
Enrile
complained that the Ramos administration erred in
pushing through with the sale of Petron shares to Saudi
Aramco, lamenting the government had lost a vital
leverage in the foreign-dominated oil industry.
“I don’t
think Ramos understood why we formed Petron,” Enrile
said, recalling that former President Ferdinand Marcos
put up Petron by acquiring Esso and Mobil “precisely
because we wanted to know what is going on in the oil
industry for the protection of the people. But those who
sold it did not know this background…as a result the
government cannot understand the pricing system now.”
Petron
supplies nearly 40 percent of the country’s total fuel
requirements, with more than 1,250 service stations
nationwide which, Santiago noted, makes it the largest
service-station network in the country. It is owned
jointly by the Philippine National Oil Co. (PNOC) under
President Antonio Cailao and by Aramco Overseas Co. (AOC).
But
Aramco plans to sell its entire 40-percent stake in
Petron to a company owned by the Ashmore Group, which
has offered $550 million for the shares. Under the
shareholder’s agreement with Aramco, PNOC has 60 days
from the transfer notice, or until May 12, 2008, to
decide whether to exercise its right of first offer to
buy it back.
“Our
government should [have control of] our own oil-refining
company, so that we can protect Filipino consumers
against shocking spikes in the price of oil. But the
big question is whether the administration has $550
million to regain ownership of Petron,” Santiago added.
She
noted that while Saudi Aramco remains part owner of
Petron, it is bound to honor a 1994 Crude Oil Supply
Agreement which ends in 2014. But if Aramco sells its
equity in Petron, Aramco has the right to preterminate
the crude-oil supply agreement by simply giving 90 days’
prior notice.
“To
protect our crude-oil supply, PNOC should not waive its
right to first offer to buy until it has renegotiated
the crude-oil supply agreement. Aramco should surrender
its present right to preterminate the agreement,” she
added, even as she warned that “a sale to Ashmore might
stifle competition and serve to protect Arabian national
companies.”
For his
part, Enrile pointed out that the government sold its
shares in Petron to the Saudi company because it was
supposed to assure a steady source of oil supply. “But
if the new buyer that is going to acquire it is an
investment house, what if they dump the shares in the
market? We ought to look deeper into this to ensure that
our national interest would be protected,” Enrile added. |
