US investment fund,
Ashmore, has bought Saudi Aramco's 40 percent stake in Petron Corp. for P22.5
billion. The deal is nobody's business but Ashmore and Aramco's. Gloria Arroyo,
however, would not leave a presumably purely commercial transaction well alone.
She said the purchase validated the government's privatization efforts and was a
vote of confidence in Petron.
Had Ashmore bought the government's 40 percent share in
Petron, there would have been reason to link the deal to government's
privatization efforts. That would have brought in P22.5 billion in cash to the
Treasury, and government would have finally got out of one of the few big
businesses that continue to be in state hands. Or Ashmore could have made a
tender for the 20 percent of Petron in the public's hand. That would have meant
a direct inflow of foreign investment funds.
Vote of confidence in Petron? There was a seller and there
was a buyer. Ashmore buy-in is certainly a vote of confidence. But the same
cannot be said of Aramco. We don't know if it earned or lost at the price of P6
a share. What we are sure of is that it pulled out of the country, a divestment
that can be interpreted as a loss of confidence in Petron.
Of course, we cannot rule out the possibility that Ashmore
bought the Aramco stake on behalf of one of the Saudi princes or even the Saudi
royal family as part of a global re-structuring of Saudi assets to sort what are
privately owned and what are state owned. Aramco is owned by the Saudi
government which is not exactly running out of cash. So it was downright
inconceivable for Aramco to sell its stake in Petron. At current exchange rates
the sale was worth $550 million, just petty cash by Saudi reckoning.
Earlier we said that the deal was none of our business.
That's not exactly right. The reason the Ramos administration sold 40 percent of
Petron, which used to be wholly government owned, was first, to raise money and,
second, to secure a strategic partner which could ensure supply of Petron's
crude requirements. The global oil supply crunch has not improved since the
early 1980s. In fact, it has worsened, with crude now hitting $100 a barrel.
Petron, thus, needs a strategic partner-supplier all the more.
Petron officials yesterday gave the assurance that Aramco
would continue to honor its supply commitments to Petron. The word used by the
officials was "in perpetuity." But in business, relations do not last forever.
Petron has lost a strategic partner-supplier. That's the bottom line in this
transaction. No Palace PR spin can change the fact.
