By Sheldeen Joy Talavera, Reporter
SAUDI ARABIA’S Aramco is making a comeback to the Philippine marketplace as it prepares to acquire a 25% ownership interest in Unioil Petroleum Philippines, Inc.
In distinct announcements, the Saudi oil behemoth and Unioil disclosed that they entered into a conclusive agreement, which is contingent on specific stipulations including regulatory consents.
No financial specifics of the deal were disclosed.
“This investment signifies another advancement in our worldwide strategy to broaden Aramco’s retail footprint, and we eagerly anticipate bringing Aramco’s premium products and services to consumers in the Philippines,” Yasser Mufti, Aramco’s executive vice-president of products and customers, stated in a release.
The agreement surfaces 17 years after Aramco, recognized as the globe’s largest oil producer, departed the Philippines following the divestiture of its 40% share in Petron Corp. In 1994, Aramco invested in Petron during its privatization by the Philippine government.
Aramco, the state-owned oil corporation of Saudi Arabia, declared in a statement that it intends to “leverage anticipated expansion in the high-value fuels sector within the Philippines.”
“This acquisition represents further advancement in Aramco’s strategic downstream growth and expansion of its international retail network, which aims to create additional venues for its refined offerings,” the firm asserted.
Unioil, founded by the Co family in 1966, is a diversified downstream fuel distributor operating 165 retail outlets and four storage facilities across the Philippines.
“The strategic investment from Aramco aligns perfectly with our goal to become the preferred fuel retailer and to provide our customers with top-tier fuel solutions,” remarked Kenneth C. Pundanera, president of Unioil.
Janice Co Roxas-Chua, chief executive officer of Unioil, characterized the arrangement as “a significant milestone in Unioil’s 58-year journey.”
“We are confident that this will empower us to accelerate our growth and development, foster innovation, and fortify our status as a frontrunner in the wholesale and retail fuels arena,” she stated.
In the framework of the partnership, Unioil will introduce Aramco’s brands and Valvoline-branded lubricants to Filipino consumers.
In a request for comment, Jayniel Carl S. Manuel, an equity trader at Seedbox Securities, Inc., mentioned that Aramco’s global stature could also elevate Unioil’s market position, fostering both local and international confidence in its brand and potentially increasing market share.
“Securing a direct association with one of the world’s most prominent oil producers could supply Unioil with a more stable and economical supply of crude and refined products, enhancing its competitiveness in both retail and industrial sectors,” he elaborated via Viber.
Mr. Manuel indicated that the “high-profile nature” of this investment suggests that the Philippine downstream sector is an appealing environment for foreign investors, which could potentially spur further international collaborations, intensify competition, and propel technological advancements.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., stated that Aramco’s re-entry into the Philippine retail sector is expected to invigorate competition, prompting existing market players to innovate and enhance their offerings.
“The arrival of a global powerhouse like Aramco might draw more attention to the Philippines’ fuel landscape, indirectly benefitting local brands through increased consumer and investor interest,” Mr. Arce commented in a Viber message.
He noted that the projected expansion in infrastructure to support Aramco’s operations “may reduce obstacles for other foreign investors, creating a ripple effect.”
Juan Paolo E. Colet, managing director at China Bank Capital Corp., remarked that Aramco’s entry as a strategic investor will enhance Unioil’s positioning for expansion and competition as a leading fuel retailer.
“Aramco’s return to the domestic oil market also reflects optimism and conviction regarding the country’s economic future,” he mentioned via Viber.
He added that this initiative could “attract other global oil entities lacking or with limited domestic exposure to seek substantial partnerships or investments within the Philippines.”