PNOC EXPLORATION Corp. (PNOC-EC) plans to buy Euro 4 gas oil or diesel fuel from the seller’s point of origin in a move that has seen the state-led company setting a new deadline in its bid to import competitively priced petroleum products.
In the letter of intent posted on its website, the energy exploration arm of state company Philippine National Oil Co. (PNOC) set the deadline of submission for interested sellers at noon of Sept. 13, 2018.
“Late offers shall not be accepted,” the PNOC unit said.
The new deadline follows pronouncements from the Department of Energy (DoE) that it planned to import the petroleum products by end-June, which it moved to July until the new date set by PNOC-EC. The DoE secretary chairs the PNOC board.
The call for sellers is also silent about importing from Russia, which DoE Secretary Alfonso G. Cusi cited when he first announced the plan earlier this year. He had said Russia was willing to offer the fuel at costs cheaper than prevailing prices.
PNOC-EC’s specification for the fuel is a sulfur content of 50 parts per million (PPM), or the standard for Euro 4. It said the port of loading is as designated by the seller, while the port of destination is any safe port in the Philippines that it would designate. Euro 4 is a globally accepted European emissions standard for vehicles.
The company set the quantity at 50,000 metric tons for the trial shipment. Subsequent shipments of up to four shipments per month and up to one year are to be mutually agreed by the seller and the buyer.
The payment term is through letter of credit, while the delivery term is within 15 days after signing of the contract.
PNOC-EC said it reserves the right to cancel, terminate or discontinue its intent to buy the petroleum products “for any justifiable and reasonable grounds without any liabilities, whatsoever.”
In late May, the DoE said it was planning to source petroleum products from Russia and other countries that are not members of the oil cartel Organization of the Petroleum Exporting Countries (OPEC).
It said the move was meant to “establish a strategic petroleum reserve (SPR) to cushion the impact of the rising price of oil in the international market.”
Mr. Cusi said the government was aware of the country’s “vulnerabilities to abrupt changes in the international oil situation and impending threats on the same, hence we are formulating various strategies to address those vulnerabilities to cushion the impact for our consumers.” — Victor V. Saulon