DAVAO-BASED independent oil company Phoenix Petroleum Philippines, Inc. (Phoenix) announced on Thursday that it plans to acquire the liquefied petroleum gas (LPG) business in the Philippines of Petronas Dagangan Berhad (PDB), a Malaysian oil and gas company listed on Bursa Malaysia.
In a disclosure to the local bourse, Phoenix Petroleum said that a memorandum of understanding (MoU) was entered on 24 May 2017 with PDB (Netherlands) B.V., a wholly-owned subsidiary of PDB, in relation to the planned 100 percent share acquisition of Petronas Energy Philippines, Inc. (PEPI) and its affiliate, Duta, Inc.
Operating in the Philippines for over 20 years, PEPI is engaged in the business of selling LPG in cylinders for household and commercial use as well as LPG in bulk for industrial use and autogas, an environmentally-friendly alternative fuel for vehicles.
Completion of the transaction is subject to the approval of the Philippine Competition Commission (PCC)
“We are very excited about this asset not only because it represents a new product that Phoenix can offer but also because we know that it has been operated in line with the operating standard of Petronas, a Fortune 500 company. PEPI’s level of excellence, professionalism and adherence to the highest of global standards is impressive,” Dennis Uy, president and CEO of Phoenix, said.
The potential acquisition of the LPG business is consistent with Phoenix’s goal of becoming one of the leading oil & gas players in the Philippines, Uy added.
With its foray into the LPG space, Phoenix aims to build significant presence in the non-fuel petroleum markets, which currently account for about 1 percent of the company’s business.
PEPI generates most of its sales in the Visayas and Mindanao—underpenetrated regions, with increasing disposable incomes, and attractive demand prospects. This will allow Phoenix to further grow this business in its home market, where there is room for profitable industry expansion and less competition compared to Luzon).
Phoenix views the LPG business as a strong strategic fit as it broadens its product portfolio and petroleum presence with a particular emphasis in Visayas and Mindanao.
Phoenix Petroleum is the leading independent oil company in the Philippines, engaged in the trading and marketing of refined petroleum products and lubricants, operation of oil depots and storage facilities, hauling and into-plane services.