The Saudi Arabian Oil Company (Aramco) is returning to the Philippine market after a 17-year absence by investing in a 25 percent equity stake in Unioil Petroleum Philippines Inc.
In a statement on Thursday, Unioil said “it has entered into definitive agreements regarding a strategic investment by Aramco.”
“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 Chief Executive Officer Janice Co Roxas-Chua said.
Once the partnership is fully established and completed, Unioil will introduce the Aramco and Valvoline products to the domestic market.
Aramco used to own a 40 percent equity in Petron Corp. before divesting itself of Petron shares in 2008. Unioil President Kenneth Pundanera said Aramco’s investment in Unioil “is fully in line with our ambition to be the fuel retailer of choice and support our customers with top tier fuel solutions.”
In a separate statement, Aramco said the planned acquisition, while subject to customary closing conditions and regulatory approvals, will allow the company to capitalize on anticipated growth of the high-value fuels market in the Philippines.
The deal represents further progress in Aramco’s strategic downstream expansion and growth of its global retail network, which aims to secure additional outlets for its refined products, the primarily state-owned company said.
“Our international expansion aims to capture additional value and enhance our participation in vibrant economies, in collaboration with established partners,” said Yasser Mufti, Aramco executive vice president of products and customers.
Confidence in PH
Aramco’s re-entry to the Philippine market through an acquisition of a 25 percent equity in fuel retailer Unioil is a “show of confidence” in the Philippine economy, Astro del Castillo, managing director of First Grade Finance Inc., told Malaya Business Insight in an interview on Thursday.
“It’s a welcome development. Aramco’s acquisition of a 25 percent stake in Unioil is a significant show of confidence. This investment allows Aramco to tap into the growth potential of the Philippine market once again while strengthening its global retail presence,” Del Castillo added.
The Aramco-Unioil partnership holds the potential to transform “the competitive landscape of the Philippine petroleum industry,” while benefiting both companies and Philippine consumers, he added.
Data from the Department of Energy showed Unioil holds an 8.1 percent market share in the fuel retail industry as of end-June 2024.
