In a 5-page manifestation submitted to the Supreme Court, the oil giant said it will no longer pursue its bid to keep the storage facilities in Pandacan due to “economic and business” considerations.

Prior to this announcement, Petron’s controlling shareholder, diversifying conglomerate San Miguel Corp, announced that it would buy 35% of Manila North Harbour Port Inc., which in 2009 won a 25-year contract to operate and develop one of Manila’s major ports.

The listed conglomerate had told the local stock exchange in early January that it had set aside an initial budget of P20 billion for the construction of an integrated logistics complex at the harbor area. The proposed complex include the construction of a fuel depot for the storage needs of the conglomerate.

The current depot in Pandacan lies along the Pasig River, which drains into the Manila Bay. The North Harbour port is located at the Manila Bay and closer to Petron’s oil refinery in Limay.

The Limay refinery sits on the side of the Bataan peninsula that faces Manila Bay.

In 2009, Petron had said that it would phase out its Pandacan operations after the Supreme Court denied the oil firms’ petition to allow them to stay.

Pilipinas Shell Petroleum Corp. and Chevron Philippines (Caltex) have been adamant in keeping their Pandacan operations since they use an existing pipeline to deliver their products to Metro Manila. Pilipinas Shell’s refinery is located in Batangas (south of Manila), while Chevron imports finished products. A relocation would entail additional costs, noted Pilipinas Shell’s head.

Petron, on the other hand, uses barges to deliver fuel from its Limay refinery to the Pandacan oil depot.

Pandacan depot

Fears of a terrorist attack pushed for calls to relocate the ‘Big 3’ oil firm’s operations at Pandacan elsewhere. The oil depot operations at the 36-hectare area are within a largely residential area and near Malacañang.

In 2008, the Supreme Court affirmed with finality its decision upholding Manila City Ordinance 8027, which reclassified parts of Pandacan and Sta. Ana from industrial and commercial zones. The councilors cited health and safety reasons since the oil facilities are located in the middle of the metropolis.

The oil companies contested the legality of Ordinance 8027 for being discriminatory. They said that local zoning ordinances should be community wide and not targeted at specific projects or companies.

In May 2009, Manila Mayor Alfredo Lim signed Ordinance 7177, which created zones for medium and heavy industries. In effect, it repealed Ordinance 8027 and superseded the Supreme Court order, thus allowing oil depots to stay put.

Social Justice System (SJS) and former Manila Mayor Lito Atienza contested the latest city ordinance for being illegal and unconstitutional.

The petition is still pending resolution before the Court.

Relocation reasons

“The relocation of Petron’s facilities in the Pandacan area to another location within 5 years because of economic and business reasons is entirely compatible with the fact that Ordinance No. 8187 is a valid enactment of the City of Manila,” Petron said in its 2010 manifestation to the Supreme Court.

Petron made the manifestation in response to a motion earlier filed by Pilipinas Shell branding its decision to cease operations in Pandacan as a “complete turn-around” from its original position and will have “far-reaching consequences to the future of the Pandacan terminal.”

Pilipinas Shell used Petron’s manifestation as its excuse in seeking another extension of time to file a memorandum on the petition filed by the SJS and Atienza.

“Petitioner-intervenor PSPC (Pilipinas Shell Petroleum Corp) is therefore constrained to make an in-depth study on the implications of the foregoing manifestation by intervenor Petron to the former’s continued operations in the Pandacan terminal,” Pilipinas Shell stressed.

Pilipinas Shell is opposing the transfer of its storage facilities citing the high costs of relocating oil tanks from Pandacan, which could trigger oil price hikes.