BATANGAS Land Company Inc. (BLCI), a government-owned and controlled corporation (GOCC) and Chevron Philippines Inc. (CPI) have inked a Memorandum of Understanding (MOU) to renew the energy firm’s lease of assets for another 25 years, according to the Department of Trade and Industry (DTI).
“With the MOU signed, BLCI, a GOCC, which is a subsidiary of the NDC chaired by Secretary Pascual, entered into an agreement with CPI to renew the latter’s lease of certain parcels of land where the company’s energy infrastructure is situated until 2050,” the DTI said in a statement issued last Wednesday.
Moreover, the DTI noted the renewal of CPI’s lease for another 25 years “is expected to contribute greatly to the Philippine government’s efforts to facilitate economic recovery and expansion.”
Pascual emphasized this collaboration between CPI and BLCI is “essential” in fulfilling one of the country’s “most important objectives,” which is pursuing energy security.
“This shall help address energy supply and cost-related challenges and will provide Filipino consumers access to reliable, safe and affordable energy,” the DTI’s statement read.
Good housekeeping
IN a message sent to reporters through Viber, the DTI revealed it was last March when CPI “formally notified BLC of its intent to renew certain parcels of land under the 2010 Lease Renewal Agreement for a period of 25 years, for a total lease period of 75 years or until 2050.”
This intent was backed by the Department of Energy (DOE). In a 2023 letter to the DTI, the DOE said it has favorably endorsed and supported CPI’s continued use and operation of its terminals in these areas to ensure the stability, advancement, energy development objectives and security interests of the country, which are all critical for the economic growth and development of the Philippines.
Energy Secretary Raphael P.M. Lotilla said Chevron’s presence over the many years in the Philippines represents “a seal of good housekeeping.”
“We have supported this step and I hope this will encourage Chevron to actually increase its footprint the Philippines. Our demographics show that the country continues to grow and that I expect Chevron will grow fully with us,” Lotilla said.
Crucial role
FOR his part, CPI Chairman Billy Liu said the MOU between CPI and BLC “underpins the intention of both parties to work towards a mutually satisfactory agreement for the renewal of CPI’s lease.”
Liu added that their terminals form the core of a network of over 600 service stations and terminals “that play a crucial role in supplying the fuel needs of the transportation, maritime, aviation and power generation sectors in the Philippines.”
The lease covers the following areas: San Pascual, Batangas; Lapu-Lapu, Cebu; San Fernando (Poro), La Union; and, Sasa, Davao City.
CPI said it intends to maintain significant investments on the leased premises consisting of energy infrastructure that are indispensable for the continued, safe and environmentally-sound operation of its terminals.
Aside from the Chevron Batangas Terminal, CPI’s other major terminals services the fuel needs of major growth regions. The Lapu-Lapu Cebu terminal provides fuel for Central Visayas. The Sasa terminal in Davao services Mindanao while The Poro Point terminal provides quality fuels to Northern Luzon.
“Today is a momentous occasion that marks a continuous and longtime partnership. I’m glad we are signing this MOU because despite our differing interests [as], you, in the private sector and we, in the government, have come together to strengthen our ties further and align our goals in the rebuilding of our nation’s economy,” said BLC President Lilia L. Arce.
Investor confidence
IT was last Monday when the DTI announced that United States Ambassador to the Philippines MaryKay L. Carlson and Trade and Industry Secretary Alfredo E. Pascual witnessed the signing of the MOU between CPI and BLCI, a subsidiary of the National Development Co. (NDC).
Speaking as NDC chairman, Pascual said the MOU signing is a “testament” to the outcome of the Philippine government’s efforts to strengthen US-Philippines economic relations.
“We are delighted to know that there is this intent on the part of [CPI] and [BLCI], as documented in this MOU, to renew the lease on Batangas Land’s assets,” Pascual said.
“This is a testament to continued investor confidence in the Philippines. And it signifies the country’s ability to provide a long-term enabling environment for growth of global companies that choose to do business in the country,” the Trade chief added.
Private-public partnership
GOVERNMENT Corporate Counsel Justice Rogelio V. Quevedo, one of those who witnessed the MOU signing, expressed elation “to witness this ceremony to show the continuing commitment of the US businesses in the Philippines.
“I look forward that with the thrust of this administration to encourage more private public partnerships, we will be seeing more American businesses renew their commitment to the Philippines economy,” Quevedo said. “I hope that the Office of Government Corporate Counsel will be having more ceremonies like this and the approval of the contracts, especially, in private-public partnership.”
Currently, Chevron operates through two subsidiaries in the Philippines. Aside from CPI, Chevron Holdings Inc. (CHI) supports the company’s global business through back-office processes such as finance, human resources, information technology, downstream shared services and procurement.
Chevron markets Caltex fuels, lubricants and other petroleum products in the Philippines.