Deadline Set for Pandacan Closure

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Three oil companies face a mid-July deadline to vacate the Pandacan oil depot in Manila, a major conduit for fuel and lubricants supply in the Philippines.

Manila’s mayor, Joseph Ejercito Estrada, announced a July 15 deadline last week for Petron, Shell and Chevron to exit the facility in order to make room for commercial development. The nations Supreme Court late last month ordered that the oil companies submit plans in January for their exit from Pandacan and then follow through on them within six months.

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Large portions of the lubricants and fuels imported to the Philippines pass through Pandacan, but the depot is viewed by many as a security threat to the residential areas that have grown up around it. Politicians, residents, Catholic Church officials and the oil companies have fought about the facility for years.

In 2009, the Manila City Council reclassified the site for commercial use, but a subsequent ordinance re-designated it for industrial use, which would have allowed the depot to continue operating. The Supreme Courts November ruling struck down the latter ordinance.

Petron had already formed plans to leave the depot by the end of 2016 and stated that the accelerated timeline will not cause disruptions. Petron Chairman and Chief Executive Officer Ramon S. Ang said the company is ready to stop operations at Pandacan and that relocating from there will not affect product supply or prices.

We made a commitment to stop our operations and we are ready. We have identified several alternative sites in Luzon to absorb our volumes in Pandacan, Ang said. Shell and Chevron are also gearing up for relocation.

Ang said a move out of Pandacan actually makes good business sense because it coincides with the growth in demand for petroleum products outside the Manila metropolitan area and brings supply points closer to emerging demand centers and Petrons growing number of retail stations.

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