After earlier hinting that foreign oil firms were keen to set up refineries in the country, the Energy department confirmed that an agreement has been signed for a regional refinery hub.
"There is a listed oil firm in Dubai and we have signed a memorandum of agreement with them to lease land for refinery. The lawyers are just finalizing the terms of a contract," said Energy Secretary Jose Rene D. Almendras in an interview with reporters last week.
Mr. Almendras said the Philippine National Oil Co.-Alternative Fuels Corp. (PNOC-AFC) will be leasing out a 100-hectare property in Bataan to the firm.
The firm is not expected to partner with a local firm for its operations. Mr. Almendras said the agreement between PNOC-AFC and the Dubai firm will not extend to a joint venture.
The refinery "is meant for regional use and is patterned after the Central American concept," he said.
Mr. Almendras had said back in March there up to three foreign investors that were interested in putting up refineries and depots in the country that will process crude oil for export.
He would not name the investors due to a confidentiality agreement.
The country can expect to buy processed oil from the refineries, he said.
"The other investors are still looking for areas. They are choosing to set up shop in the Philippines because of our geographic location which is strategic so they can build a hub," said Mr. Almendras.
He would not disclose the how much the investment foreign firms looking to build refineries in the country will have but noted the amount "will be very big."
The Energy department earlier said it wants to offer the country as a strategic market location for firms.
There are currently two refineries in country: one operated by Pilipinas Shell Petroleum Corp. in Batangas and the other by Petron Corp. in Bataan.
Petron began a $1.8 billion refinery expansion project last year to be able to process different kinds of crude oil.
Shell has not yet announced any additional investments for its refinery but is currently studying opportunities for expansion, earlier reports show.
Philippine refineries mostly import crude oil for processing.
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