Workers cleaning the Petronas logo at the petrol station near the Penchala Link. AZMAN GHANI / The Star
KUALA LUMPUR: Petronas Dagangan Bhd
(PetDag) is seeking to exit the liquefied petroleum gas (LPG) business in the Philippines.
In a press statement, the principal domestic marketing arm of Petroliam Nasional Bhd (Petronas) said it was divesting its 100% interest in Petronas Philippines Energy Inc (PEPI) and 40% interest in Duta Inc to Phoenix Petroleum Philippines Inc.
Duta Inc leases properties to PEPI, which in turn distributes and markets LPG and other petroleum products.
PDB (Netherlands) BV, a wholly-owned subsidiary of PetDag, on Wednesday entered into a memorandum of understanding (MoU) with Phoenix Petroleum. PDB (Netherlands) also represented local partners Alsons Consolidated Resources Inc and Masaligan Inc, the owners of the remaining interest in Duta Inc that also seek to divest their stakes,
The divestment to the Philippines’ largest independent oil company is, however, subject to approval by the Philippine Competition Commission.
PetDag said it expected the transaction to be completed by the fourth quarter of this year. It did not give any estimate of the transaction’s value or disclose the financial performance of the two companies to be divested.
In the statement, PetDag chairman Md Arif Mahmood said the exit from the LPG business in the Philippines was part of the company’s portfolio review exercise. He did not elaborate.
PetDag - which has the lion’s share of the cooking gas and industrial LPG market in Malaysia - operates three downstream companies overseas, the others being in Vietnam and Thailand.
The Petroliam Nasional Bhd (Petronas) subsidiary had tried to sell its Vietnam businesses - Petronas (Vietnam) Co Ltd (PVL) and Thang Long LPG - to Totalgaz Vietnam Ltd.
While it managed to complete the sale of PVL, Totalgaz cancelled the other deal in January this year.
PEPI, set up in 1995, started commercial operations in mid-1997. It was originally under parent Petronas but not PetDag.
In 2012, PetDag took over Petronas’ downstream companies in the Philippines, Vietnam and Thailand for US$62mil cash.
In 2014, Petronas executive vice-president of downstream and chief operating officer at the time, Datuk Wan Zulkiflee Wan Ariffin (now Petronas president and group CEO), had said Petronas was allocating RM200mil in capital expenditure over the following three years, mainly to beef up its cooking gas distribution operations in the Philippines.
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