The Philippines’ largest oil refiner, Petron Corp, said it will ship more lubricants to Cambodia and its neighbours this year as a 21 per cent jump in second-quarter profits boosted its shares.

Petron is also studying plans to either put up a refinery in the southern Philippine island of Mindanao or set up a crude unit at an existing plant on Bataan island, west of Manila.
“The signs are very encouraging,” the company’s president Khalid Al-Faddagh said. “We continue to place more volume into Cambodia and this year we are also continuing to assess other possibilities.”
“We are very hopeful that between now and (the) year-end we will see more (export) volume in branded lubricants ... We feel the prospects are very good,” he said.
Second-quarter net profit rose to 1.69 billion pesos ($32.8 million) from 1.4 billion pesos a year ago, mainly due to rising exports and higher global prices.
First-half net profit rose to 2.7 billion pesos from 2.3 billion a year ago.
Analysts on average expect flat full-year 2006 net profit of 6.025 billion pesos, versus 6.05 billion in 2005, according to Reuters Estimates.
The rise in exports made up for a weak domestic market, which Al-Faddagh said was expected to continue shrinking due to sustained price increases, with market demand down five per cent in the first half from a year ago after sliding eight per cent in 2005.
The company’s exports jumped 140 per cent to 5.6 million barrels per day (bpd) in the first half from a year earlier. Exports had risen 45 per cent in 2005, accounting for 15 per cent of sales.
Petron is market conditions for more borrowings after an oversubscribed 5.5 billion peso issue to fund a refinery upgrade.
The upgrade, to be completed in 2008, is aimed at raising its production of petrochemicals, which it also exports.
Petron cairman Nicasio Alcantara said the company was carefully studying plans for a new $3 billion, 200,000 bpd refinery.
Petron Corp, the Philippines’ largest oil refiner by capacity and sales, is studying the feasibility of building a new oil refinery or building an ethanol plant in southern region of Mindanao.
Petron president and chief executive Khalid Al-Faddagh said the study was an offshoot of President Gloria Macapagal Arroyo’s request for Saudi Aramco to build a refinery in the impoverished region of Mindanao.
Arroyo made the request to executives of Saudi Aramco during her visit to Saudi Arabia. Saudi Aramco owns 40 per cent of Petron.
Petron is also considering expanding its existing oil refinery north of Manila.
“Of course it has to make economic sense,” Al-Faddagh said. “That’s really what we have agreed on, for Petron to do a feasibility study.”
He said a previous study is now being revisited because it was conducted under “different economic conditions.”
Al-Faddagh said if an oil refinery is not economically feasible in Mindanao, Petron may only pursue the installation of an ethanol plant in the southern region.
“But we need to be assured that we have a very strong (sugarcane) supply base in the Philippines,” he said.
Ethanol can be derived from sugarcane and the Philippines is a major sugarcane-growing country, exporting 137,352 tonnes of sugar to the US last year.
Petron has a commitment to blend ethanol in its gasoline products by next year.
It signed an agreement last year with San Carlos Bio-Energy Inc, a Philippine company, to produce 100,000 litres of ethanol by next year. Al-Faddagh said the feasibility study will take at least two months to complete.
Petron Corp also said it was raising for a second time the amount of its five-year corporate notes issue to 6.3 billion pesos ($122.6 million) due to strong demand.