PCC clears Aramco investment in Unioil
Global oil giant Saudi Arabian Oil Company is inching closer to reentering the Philippine market after the Philippine Competition Commission (PCC) approved its acquisition of a stake in local petroleum player Unioil.
The PCC said the proposed transaction would not likely result in a substantial lessening of competition in the relevant markets since the parties involved have limited market access.
In a statement on Tuesday, the antitrust body said the entities “face substantial competition from other established players, and the entry of new players is likely, timely and sufficient due to low barriers to entry.”
Aramco, through its affiliate Aramco Asia Singapore Pte. Ltd., is reestablishing its presence in the local scene by acquiring a 25-percent stake each in Unioil Petroleum Philippines Inc. (Unioil Petroleum) and Unioil Energy Pte. Ltd. (Unioil Energy).
The PCC said its Mergers and Acquisitions Office had considered various factors when it evaluated whether or not the transaction would raise competition concerns. These include the relevant markets for the nationwide nonretail supply of automotive and industrial lubricants and coolants.
It also evaluated the global ex-refinery and nonretail supply of diesel and gasoline, along with the nationwide supply of ethanol as an input for gasoline in the nationwide nonretail market.
Firms announced the acquisition in separate statements in February, subject to closing conditions and regulatory approvals.
At that time, Aramco said it “aims to capitalize on anticipated growth of the high-value fuels market in the Philippines.”
Aramco executive vice president for products and customers, Yasser Mufti, said the investment represented another step in expanding Aramco’s retail network.
“Our international expansion aims to capture additional value and enhance our participation in vibrant economies, in collaboration with established partners,” Mufti said.
“We are confident that this will equip ourselves in accelerating our growth and development, further innovate, and strengthen our position as a leader in the wholesale and retail fuels market,” Unioil CEO Janice Co Roxas-Chua said.
Upon closing the deal, Aramco plans to extend its brand, competitive retail offerings and Valvoline-branded lubricants to select retail stations in the country.
Aramco is a majority state-owned oil producer in Saudi Arabia. It is one of the world’s largest integrated energy and chemicals companies.
The global oil firm ventured into the Philippine market by acquiring a 40-percent stake in local oil giant Petron Corp. in 1994.
However, in 2008, Aramco divested its stake in Petron to British investment manager Ashmore Group for $550 million, marking its exit from the Philippine market.
Unioil, a Filipino company founded by the Co family in 1966, is engaged in the sale of various petroleum products such as diesel, gasoline, asphalt, coolants and lubricants.
Meanwhile, Unioil Energy is a foreign trading company that supplies gasoline and diesel to the Philippine market.
