BOI OKs Seaoil’s oil depot, Balayan oleochemical projects

The Board of Investments (BOI) has approved Seaoil Philippines Inc.’s oil depot facility in Davao del Sur and Balayan Bay Batangas Development Inc.’s (BBBDI) oleochemicals project which have combined investments worth P1.107 billion.

In a statement, the BOI said it recently approved the registration of Seaoil’s P287 million four storage-tank oil depot project.

Seaoil’s project, which started operations in September, provides an additional 36.9 million liters of gasoline and diesel to its existing 41.050 million liters of storage in the southern part of Mindanao, translating to a total of 78 million liters of fuel capacity.

“This combined capacity is actually more than enough to accommodate the average daily requirement of 73 million liters of fuel nationwide. The additional storage capacity of fuel means additional supply of fuel may allow the company to efficiently manage its inventory levels and avoid external shocks that could lead to oil price hikes or at the very least mitigate its price increase in several parts of Mindanao,” Trade Undersecretary and BOI managing head Ceferino Rodolfo said.

Seaoil’s project qualifies as bulk marketing of petroleum products under the Investment Priorities Plan - Special Laws list, particularly Republic Act (RA) 8479 or the Downstream Oil Deregulation Act of 1994.

RA 8479 liberalizes and deregulates the downstream oil industry to have a competitive market with fair prices, as well as adequate and continuous supply of environmentally clean and high-quality petroleum products by encouraging new oil industry players through the grant of incentives.

Seaoil, owned by businessman Francis Yu with Caltex Australia as minority partner, currently offers one of the lowest fuel prices per liter in the southern part of the country.

The company has said diesel prices could decline by around 10 percent or by P5 from prevailing prices, given the additional depot capacity, on top of the weekly rollbacks amid the continuing drop in global oil prices.

Aside from Seaoil’s project, the BOI also approved the application of BBBDI’s P820 million oleochemicals project located at the Phoenix Petrochemicals and Industrial Park in Calaca, Batangas.

As a new manufacturer of linear alkylbenzene sulfonate (LABS), coconut fatty alcohol sulfate (CFAS) and sodium lauryl ether sulfate (SLES), BBBDI’s project, which started operations in October, has a total sulfonation capacity of 40,000 metric tons per year and employs 102 personnel.

LABS, CFAS and SLES are considered important in the production of laundry detergent and personal care items such as toothpaste, soap bars, shower cream and shampoo.

“Fast-moving consumer goods local manufacturers of home/personal care and cleaning products together with the upstream oleochemicals industry stands to greatly benefit from this project since the products to be produced by BBBDI will serve as a costefficient substitution to previously imported oleochemicals. Local produce means shorter order-to-delivery lead time, better quality, better pricing and more flexibility,” Rodolfo said.

By being approved by the BOI, both firms can enjoy incentives for the projects.