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Phoenix’s Uy confirms talks with CNOOC to enter LNG business

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PHILSTAR

By Victor V. Saulon, Sub-Editor

PHOENIX Petroleum Philippines, Inc. is in preliminary discussions with a Chinese oil major to enter the liquefied natural gas (LNG) business, its owner said.

Phoenix President and Chief Executive Officer Dennis A. Uy said he has held “early talks” with China National Offshore Oil Corp. (CNOOC) to study the LNG segment of the fuel business.

“We’re also looking at that (LNG),” Mr. Uy told reporters.

He declined to disclose details of the talks except that Phoenix has been conducting a study of the LNG business.

Mr. Uy has a record of moving fast on opportunities that would create synergies with his existing businesses, which started with Phoenix as a small Davao City-based oil company that has grown to become the biggest independent player in fuels.

“As an entrepreneur, it is second nature for me to jump at opportunities, to find a need and serve it,” he told participants of the BusinessWorld Economic Forum 2018 at the Grand Hyatt Hotel at the Bonifacio Global City on Friday.

Mr. Uy also said the capacity of his asphalt business is 12 million liters.

Earlier this month, Phoenix broke ground on the asphalt facility it will build with local and foreign partners in Calaca, Batangas.

Raymond T. Zorrilla, Phoenix’s vice-president for external affairs, confirmed the target capacity and said that it would add to the company’s existing fuel sales. He said the company sold 1.2 billion liters of fuel last year. He could not immediately give an estimate for the asphalt’s business’ share of Phoenix’s expected sales.

Asked about the expected commercial operation of the asphalt facility, he said: “If you want to be realistic about it, probably next year.”

Phoenix Asphalt Philippines, Inc., is the joint venture of Phoenix Petroleum with Thailand’s Tipco Asphalt Public Co. Ltd, and PhilAsphalt Development Corp.

In his speech delivered during the forum yesterday, Mr. Uy re-traced the start of Phoenix that gave rise to the creation of the parent holding firm Udenna Corp.

“Nobody cared about Phoenix when we were starting, certainly not the giants. Phoenix owned just a handful of gas stations and it was in Davao, too far afield to even be on their radar,” he said.

“Phoenix’s perceived weaknesses we used to our advantage. We grew our market in Mindanao and then decided to go national, moving quickly before anybody could notice and put up roadblocks to hinder our progress,” he said. “What we lacked in size, we made up for in speed and service. What we lacked in capital, our bankers and investors helped fill.”

The petroleum business allowed him to notice early on that chartering oil tankers is both costly and created uncertainty for Phoenix’s inventory.

“So we found a tanker and bought it, and that gave birth to Chelsea Shipping. Chelsea bought more tankers and in due course acquired other shipping and logistics companies, including the largest, 2Go, bought in partnership with SM. This paved the way for the listing of Chelsea Logistics Holdings Corp. last August,” Mr. Uy said.

The acquisition of 2GO Group, Inc. introduced Mr. Yu to stakeholders who also owned a 177-hectare property in Clark, Pampanga.

“Today, we are developing it as Clark Global City — a central business district similar to Bonifacio Global City,” he said.

“Our diversification is a strategic move, anticipating disruption and economic developments that could either help us or hurt us,” he said.

Mr. Uy has since bought hospitality school Enderun Colleges. He also has the Emerald City project in Cebu, with the purchases “dovetailing with our bullish outlook for the Philippine tourism industry.”

“The logistics network of Chelsea in due course could give rise to a new business that may become larger than some of the companies we have now,” he said.

He said Udenna, a play on his name, is now a group of 70 companies in six different industries, “and still growing.”

Under Phoenix, Mr. Uy bought last year Petronas Energy Philippines, Inc., immediately giving the company a share in the liquefied petroleum gas (LPG) business, and Philippine FamilyMart CVS, Inc., which holds the exclusive franchise to the Japanese convenience store brand. He also set up PNX Petroleum Singapore Pte Ltd.