After divesting its stake in Petron Corporation in 2008, trillion-dollar energy giant Saudi Aramco is reportedly plotting a re-entry into the Philippine energy sector.

According to a highly placed source, this will be through a prospective merger and acquisition (M&A) deal with one of the largest independent Filipino-owned oil companies.

The industry source indicated that the global energy behemoth initially focused on acquiring an independent oil firm looking to sell down shares.

Saudi Aramco’s rigorous due diligence on this potential acquisition began last summer, with strategic negotiations intensifying in the past three to three months.

Beyond exploring asset purchases in the oil sector, the Middle East energy giant is also actively evaluating investment opportunities in the Philippines' flourishing renewable energy sector.

The source added that “there are some Saudi companies looking at various investment opportunities – including the country’s offers in the RE sector.”

While the source has withheld the name of the targeted acquisition, insiders in the downstream oil sector hint that Saudi Aramco has set its sights on Unioil Petroleum Philippines Corp., owned by the Co family.

Unioil entered the industry following the enforcement of deregulation policy in the late 1990s.

“Saudi Aramco has not made a final decision yet on its prospective asset buy – but the positive thing about it is: they are considering exploring investments in the Philippine energy sector once again,”  the source emphasized.

To recall, Saudi Aramco once held a commanding 40 percent stake in Petron Corporation, a crown jewel of the Philippine oil industry. They offloaded this equity for $550 million to the UK-based Ashmore Group in 2008.

That stake eventually landed in the hands of tycoon Ramon Ang, who is now the powerhouse owner and CEO of the country’s biggest oil company.

During Saudi Aramco’s time as a shareholder in Petron, one of the key executives assigned as president was Khalid Al-Falih.

When he returned to his country, he ascended to unparalleled heights in global energy diplomacy, serving as CEO of Saudi Aramco and President of the Organization of the Petroleum Exporting Countries (OPEC) Conference.

This was during a period of increased collaboration with heavyweight non-OPEC producers (i.e., Russia, Canada, China, and the United States), also known as the ‘Vienna Alliance,’ primarily focused on successive calls for production quotas.

Al-Falih also served as Minister of Health, then as Minister of Energy, Industry and Mineral Resources, and currently as Minister of Investment. He spearheaded high-level meetings with President Marcos' delegation during the President's visit to Saudi Arabia last year for the ASEAN-Gulf Cooperation Council (GCC) Summit.

For over 15 years, Saudi Aramco had turned its back on the Philippines. However, the source indicated that “their interest in the Philippines is being re-ignited because of the investment opportunities currently being offered in the energy sector.”

Despite drawing most of its wealth from oil and gas resources, Saudi Aramco has been aggressively navigating the energy transition pathway with large-scale investments in renewables, as well as targeted ventures in nuclear, hydrogen, and other innovative technologies.

In October of this year, Energy Secretary Raphael P.M. Lotilla embarked on an energy mission to Saudi Arabia to strengthen international energy partnerships and attain a diversified and sustainable energy system.

The major highlight of that mission was the signing of a memorandum of understanding (MOU) for intensified cooperation with Saudi Arabia’s Energy Minister Abdulaziz bin Salman Al Saud.

This deal with Saudi Arabia, Lotilla clarified, was a follow-up to President Marcos’ visit to Saudi Arabia in October 2023, where many Saudi state-owned companies expressed interest in investing in the Philippine energy sector.