The tides are turning in the deregulated downstream oil industry, as French multinational TotalEnergies is reportedly taking its exit from the Philippine downstream oil industry, with its planned asset sale to the Villavicencio group.

TotalEnergies Philippines counts more than two decades of business presence in the country – being one of the global energy giants which entered the domestic market after the institutionalization of deregulated policy set-up in 1998.

According to highly placed sources, “Total is already at advanced stages of negotiation or almost close to completing the planned sale of its oil business to the Villavicencio group; and the Total employees have already been informed of the company’s planned exit.”

The source noted that “on the buyer’s part, the negotiation for the acquisition was led by Raffy (Rafaelito) Villavicencio, who is the CEO of Filoil Energy,” one of the oil companies of the Villavicencio group.

The parties have not made official announcement on the deal yet, but several sources in the industry – including government sources, have already affirmed the ongoing discussion on Total’s asset divestment.

In 2016, Filoil and Total formed a joint venture to consolidate fuel sales in the deregulated downstream oil industry of the country.

But this time, it was indicated that Total is ready to pack its bags for good, hence, it opted to unload its oil business to a partner that it already worked with in the past eight years.

Aside from Filoil, the other businesses of the Villavicencio group in the oil sector are those of PetroGazz, Filpride and TWA Inc.; and previously Flying V prior to its disposal to another oil firm in the country.

TotalEnergies would be another multinational energy giant leaving the Philippine oil industry – that was after the monumental exit of Saudi Aramco when Petron was fully privatized in 2008.

It has long been projected that consolidation and mergers will eventually turn up as the ‘business play’ in the country’s deregulated oil sector – given the tough competition being posed by the independent players versus their giant counterparts.

Apart from Total, it was similarly hinted that another oil firm is planning shares sell-down to a prospective investor from the Middle East.

By far, foreign companies are having tough time understanding the complexity of political maneuvers on Philippine businesses – especially in the oil industry, be it with pile-up of tax impositions or suppressing full cost pass-on if there are series of price hikes, hence, their typical recourse is to exit from that headache-inducing market.