Maharlika Investment Corporation (MIC), the sole vehicle responsible for mobilizing and managing the country’s sovereign wealth fund, is eyeing partnership with state-owned Philippine National Oil Co. (PNOC) and the private sector to build oil storage tanks as part of government efforts to boost the country’s energy security.
During the House of Representatives’ Legislative Energy Action and Development Joint Committee hearing on Wednesday, MIC President and CEO Rafael Consing Jr. said that while PNOC has the budget to beef up oil reserves, the storage capacity will not be enough.
“So that’s where we can come in. So the idea is that we can put together a consortium with the PNOC and the private sector wherein they can contribute, let’s say, their land, their asset into the consortium,” he said.
Consing added that they, together with other private sector partners, could invest in the tank farm as capital providers while outsourcing its operations to private entities with the necessary expertise.
“We don’t know how to operate this,” he said. “So we will leave it with the private sector to run it, but we will catalyze the investment if we get to that.”
Consing said the MIC is leaning towards investing in oil storage facilities rather than buying the needed fuel for inventory because this will expose the fund to market risk.
“If Maharlika were to come in and to support the Strategic Petroleum Reserve Fund by buying the inventory, we, as MIC, would be exposed to market risk. And what we’re trying to do is we’re, in fact, trying to avoid getting exposed to this market risk,” he said.
In a separate Viber message, Consing said initial discussions with PNOC started last week.
He noted, however, that they will still need to seek approval from their respective boards and investment committees.
Consing said a technical working group will be formed following the approval. (PNA)