By Wilnard Bacelonia
MANILA – The United Arab Emirates (UAE) and Saudi Arabia are willing to build oil storage facilities in the Philippines using their own funds, giving the country potential priority access to fuel during supply disruptions, the Department of Energy (DOE) said Friday.
During the Senate Committee on Energy hearing, DOE Oil Industry Management Bureau Director Rino Abad confirmed that both oil-producing countries have expressed interest in establishing storage hubs in the Philippines without requiring the government to shoulder construction costs.
“Saudi Arabia will shoulder all the costs,” Abad told committee chair Senator Erwin Tulfo.
Tulfo said the UAE had made a similar offer, with its proposed facility to remain UAE-owned but potentially serve as a readily accessible source of petroleum products for the Philippines during emergencies.
“They said that they will construct it using their own budget, but we will definitely benefit from it,” he said.
Abad said the proposed foreign-owned hubs would normally operate commercially, but the government wants an arrangement that would give the Philippines priority or “reserve rights” when supply crises occur.
“Ang concern lang naman, in essence, is i-prioritize tayo, may reserve right tayo when the time comes na may crisis (Our concern, in essence, is for us to be prioritized, that we have a reserve right when the time comes that there is a crisis),” he said.
The DOE has already submitted a concept note sought by Saudi Arabia, whose proposed hub could have a target capacity of 50 million barrels.
Abad said the department’s newly created Philippine Strategic Petroleum Reserve team will continue discussions with the Saudi side to determine the project’s timeline and remaining documentary requirements.
The UAE would be the next country approached formally, he added.
“Natapos na-submit na rin natin yung kay Saudi Arabia, now isusunod po natin yung United Arab Emirates (We have already finished and submitted the requirements to Saudi Arabia, and now we will proceed with the United Arab Emirates),” Abad said.
He noted that Saudi Arabia and the UAE have historically been among the country’s petroleum suppliers and have export pipelines that provide routes away from the Strait of Hormuz.
Apart from the foreign-backed facilities, the Philippine National Oil Co. (PNOC) is pursuing its own government-owned strategic reserve in Bataan with an initial capacity of one million barrels.
PNOC Deputy Manager Antonio Buenviaje said the facility is targeted to be ready by 2027, with plans to eventually expand capacity to 15 million barrels.
The initial one-million-barrel reserve would cover only a little more than two days of Philippine consumption, which Abad placed at 450,000 to 460,000 barrels per day.
Tulfo pressed the DOE and PNOC to speed up administrative requirements, saying offers from major oil-producing countries could help strengthen the country’s buffer against disruptions in the global petroleum market.
“We need adequate reserves. We need to build our capacity to withstand external shocks,” he said. (PNA)
