Petron wants ‘automatic renewal’ of lease contract with PNOC

Petron Corporation is batting for ‘automatic renewal’ of its lease contract with state-run Philippine National Oil Company (PNOC) for the sites of its oil facilities and retail networks.

As asserted by Petron President and Chief Executive Officer Ramon S. Ang, PNOC “must honor the contract” which duly merits automatic renewal “under the same terms and conditions.”

He said there is no need to modify the terms of the lease pact, because those provisions were specified even after the oil firm’s full privatization way back in 2008-2009.

As explained by the oil firm, when the lease arrangement was negotiated, they were given the rights to use the sites ‘in perpetuity’ as those properties were previously under the company’s charge.

At this stage, Ang prodded PNOC to “put all of its demand in writing” and it must also show a Board Resolution of the company seeking changes in the terms of the contract.

He indicated that if they cannot resolve such concerns in series of exchange of correspondence, then the logical and prudent next step would be to elevate the matter by legal means, which may be up to arbitration proceedings.

It must be noted that PNOC President Reuben S. Lista told media earlier this week that he would want Petron to amend specific provisions on their lease arrangement before they can start negotiation on contract renewal that must be wrapped up next year.

The contract is supposed to lapse August next year and this will somehow affect the siting of at least 24 bulk plants and 67 service stations of the country’s biggest oil firm.

Fundamentally though, Petron is sounding off that it can press for renewal of the contract under the same conditions – and it is set to continue using these real estate for its facilities.

Aside from the valuation of the properties, PNOC has also engaging Petron on its plan on sites clean-up, if in the end, it will decide to abandon its leased properties.