Tuesday, July 17, 2007 Oil firm seeks to meet RP's 'green fuel' demand
BASIC Petroleum Corporation is negotiating with major and independent oil companies to supply ethanol through their gas stations in the country.
This, after the company announced that it will increase its authorized capital stock from P500 million to P2.5 billion or 10 billion shares with a par value of P.25 per share to fund the construction of a proposed bio-ethanol plant in Zamboanga del Norte.
Jose Revilla Reyes Jr., president of Zambo Norte Bioenergy Corporation, which holds an eight to 10-percent stake in Basic Petroleum, said after the launching of their bio-ethanol project that discussions with the oil companies are ongoing.
He said the bio-ethanol plant will produce 200,000 liters per day of ethanol and 50 tons of carbon dioxide a day through a six-megawatt cogeneration facility. Basic likewise acquired under a lease agreement an additional 4,000 hectares to be made into a sugarcane plantation.
According to Reyes, 50 percent of their products will be distributed locally but the remaining 50 percent will be exported to China, India and Japan.
Oscar L. de Venecia Jr., president and COO of Basic Petroleum, said they would need at least US$50 million or P2.8 billion to finance the bio-ethanol plant which is expected to be operational in September 2009.
"Basic's entry into the bio-fuels industry coupled with a more focused management of its oil exploration business will result into a positive turnaround for the corporation in the near term and likewise prime our growth momentum into the next decade," he told reporters.
Reyes said the project will be financed through a 40-percent equity and 60-percent loan from banks, adding that they are eyeing the Development Bank of the Philippines (DBP) and Banco de Oro.
Republic Act (RA) 9367 or the bio-fuel law mandates a five-percent bio-ethanol blend into gasoline by 2009 and 10 percent blend in 2011.
For 2009, the country's demand for bio-ethanol is expected to reach to 300 million liters per day and 600 million liters per day in 2011.
Because of the projected demand in bio-ethanol, the country needs 15 to 20 plants. So far, there are only two plants under construction in the country, the San Carlos and the First Bukidnon facilities, which are expected to operational next year and in 2009, respectively. (MSN/Sunnex)
