Oil firms raking in gains from high pump prices

By Charlie V. Manalo

09/09/2008

Buoyed by high pump prices, Total (Philippines) Corp. and other so-called “independent” or small oil firms are also enjoying considerably increased profits, just like their bigger counterparts Pilipinas Shell Petroleum Corp., Petron Corp. and Chevron Philippines Inc. (formerly Caltex Philippines Inc.).

Cebu Rep. Eduardo Gullas disclosed that Total reported a net profit of P324.79 million in 2007 — a huge reversal from the P290.14 net loss the firm posted in 2006.

Total is a wholly owned subsidiary of Paris-based Total S.A., one of the world’s six “supermajor” integrated oil and gas firms, along with Exxon Mobil Corp., Royal Dutch Shell plc, British Petroleum plc, Chevron Corp. and ConocoPhillips.

Gullas said another independent oil firm, Seaoil Philippines Inc., reported a net profit of P123.4 million in 2007. This was 235 percent higher than the P36.84 million that the firm posted in 2006.

Phoenix Petroleum Philippines Inc., which operates mainly in Mindanao, reported a net income of P122.36 million in 2007. This was up 65 percent from the P74.26 million that the firm posted in 2006, according to Gullas.

Meanwhile, Gullas said Unioil Petroleum Philippines Inc. realized a net income of P35.79 million in 2007. This was up 78 percent from the P20.09 million that the firm reported in 2006.

He said Filpride Energy Corp. reported a 259-percent increase in net profit, from P1.44 million in 2006 to P5.17 million in 2007.

Only Eastern Petroleum Corp. reported a slight net profit decline, to P7.18 million in 2007 versus P8.57 million in 2006, Gullas said.

Gullas cited the oil firms’ financial statements filed with the Securities and Exchange Commission as the source of his figures.

Gullas is author of House Resolution 672, urging the House committee on energy “to investigate and report the facts relating to any oil price manipulation or similar abuses committed by any person or corporation.”

Despite the increased profits of the small players, Gullas welcomed their apparent growing share of the local market for petroleum products.

“They compete directly with the Big 3. The competition may be weak for now, but they still provide some competition nonetheless. This is definitely better than absolutely no competition at all,” Gullas pointed out.

The “independent” oil firms corner around 15 percent of the local market for petroleum products. The rest of the market is dominated by the “Big 3” — Shell, Petron and Chevron.

Like Chevron, the small oil players import finished petroleum products that they then sell to retail consumers here. Only Shell and Petron operate local crude oil refineries that produce finished petroleum products.

The absolute profits of the small oil players pale in comparison to the P6.36 billion net profit reported by Shell in 2007, or the P6.04 billion net income posted by Petron the same year.

Shell also reported a net profit of P4.7 billion in the six months to June this year. Petron posted a net income of P2.32 billion in the same period.

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