The Philippine government is studying the possibility of buying back the 40-percent stake of Aramco Overseas Co. (Saudi Aramco) in Petron Corp., a top energy official said. Energy Secretary Angelo Reyes told reporters that despite the decision of Aramco to sell its shares to Ashmore Group, a United Kingdom-based investment fund manager, the government, through the Philippine National Oil Co. (PNOC), has yet to give its final say on the sale. “We still have 60 days to decide if we will exercise our right of first refusal or assign it to another buyer,” Reyes said. Reyes said in case the government decides to buy the Petron shares, the government may tap the resources of other PNOC subsidiaries. He said the NG is contemplating on using the proceeds from the Malampaya royalties in case it opts to buy back Aramco's stake in Petron. Aramco and Ashmore have already consummated their sales agreement last week. PNOC president Antonio Cailao, echoing Reyes' position, said that “we did not waive yet our right. We still have 60 days. So, it means the Aramco-Ashmore deal, though signed, is still conditional.” When PNOC sold its 40-percent share to Aramco in 1994, it was agreed that should the Saudi Arabian oil firm decide to sell its shares, the state-run oil firm has the right to buy the shares, match the offer or assign it to another buyer. One of the possible options that PNOC is looking at is to renationalize Petron. Though it would run counter to government's privatization thrust, Reyes said they have to consider and study this option. “There are people who do not agree to that (privatization). Some believes that it would be best to have an effective control of the government shares in Petron as it dominates 38 percent of the retail market, thus making it a price setter which is crucial in a continuing high oil price regime,” Reyes said. But Reyes pointed out that these are all under study. “We are only studying all our options so we can assure the public that we have reviewed all these options. We can also assure them of transparency,” he said. To further ensure protection of the government's stake in Petron, he said they would also undertake a third party study. Reyes said they are also considering the engagement of a financial advisor if necessary. “We can hire financial advisor to study if we will have to invest and if we will invest, if we have funds to support such investments,” he said. It would be noted that privatization and deregulation are part of the broad policy of economic liberalization that the government has been pursuing for the last 20 years, with the aim of spurring investments and accelerating the country's economic growth. __
