Petron sues PNOC for breach of contract
Petron Corp. has filed a case against Philippine National Oil Co. for breach of a binding and compulsory sale-leaseback contract.
The oil refining giant has asked the Mandaluyong Regional Trial Court to stop PNOC from terminating existing lease agreements for the the sites of its $3 billion refinery in Bataan, 24 bulk plants and 67 gas stations.
PNOC is nullifying the lease agreements with Petron on the ground that the terms of the contract were “onerous and disadvantageous” to the government.
Petron said PNOC’s move to cancel the lease agreements would have an adverse effect on its operations, investors and the local economy as well.
A subsidiary of the San Miguel Group of Companies, Petron supplies more than a third of the country’s petroleum requirements.
“PNOC’s actions clearly jeopardizes the country’s fuel supply security and government’s thrust to develop key industries.”
“If PNOC will continue to disregard its reciprocal obligations on the conveyance of our land, then they should return the properties to us. Petron has invested billions of dollars on these properties,” Petron said.
“By unilaterally setting aside the renewal clauses of the lease agreements and by categorically declaring its refusal to honor them, PNOC committed a fundamental breach of its lease agreements with Petron,” the company said.