Published
By Myrna M. Velasco
Breach of contract
could be the next phase of serious legal battle between Petron Corporation and
state-run Philippine National Oil Company (PNOC) on their escalating dispute
over renewal of lease contract on real properties serving as sites of vital
facilities of the oil firm.
Petron President and
Chief Executive Officer Ramon S. Ang stressed “for now, we reiterate that he
has caused PNOC to breach its agreements with Petron. We are awaiting the
position of PNOC as well.”
He added “if they don’t
want to negotiate unless we waive binding renewal clauses, then we have no
choice but to seek legal redress to protect our rights and the interest of our
shareholders.”
This week, the trading
of barbs had been on Petron court, alleging that it was PNOC that had actually
violated their lease arrangements.
“PNOC breached three
lease contracts with Petron Corporation when it wrote the latter to nullify
binding renewal clauses ahead of expiration threatening to jeopardize the oil
company’s operations,” the oil firm said. It added that such action of PNOC
also endangered “the interest of its small shareholders and
partner-stakeholders.”
The existing lease
pacts being questioned had been those for Petron’s $3.0-billion refining
facility in Limay, Bataan; the sites of 24 bulk plants and 67 gasoline
stations.
In a response-letter to
PNOC President Reuben S. Lista, the oil firm noted that it has been the
state-owned firm that was in breach of the provisions of their lease agreements.
Through its Counsel
Joel Cruz, Petron insisted that “the lease agreements for the three properties
and the renewal clauses thereon are valid and binding.”
The company added
“these are not in violation of any law nor manifestly or grossly disadvantageous
to the government.”
Because of the PNOC
chief’s letter, Petron claimed that accordingly, such “deny without legal
causes Petron’s contractual right to renew,” hence, this constituted
“fundamental breach of the three lease agreements.”
The oil firm was
referring to Lista’s letter enjoining the company “to waive certain provisions
of the lease agreements because they are inequitable, or submit remediation
plans,” so abandonment and clean-up of the specified sites could already be
enforced.
Petron further cited
PNOC’s recent move offering the properties “covered by the expiring leases this
early to interested new independent oil companies,” which it deemed to have
been “in total disregard of the rights of Petron.”
Cruz asserted “as you
very well know, the long-term lease by Petron of the subject properties and the
properties denominated as refinery properties which are the subject of a third
lease between Petron and PNOC was the primary consideration for Petron’s
conveyance of said properties at book value to PNOC.”
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