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Philippine leader in oil refinery and retail Petron Corp. is expanding as it disclosed plans to deviate from its primary purpose and include power generation and sale of electricity in its services. In a disclosure to the stock exchange, Petron said it seeks to amend its primary purpose to include electric power. It also plans to increase its capital stock from 10 billion pesos to 25 billion pesos through the issuance of preferred shares.

The Petron board, which now includes officials of San Miguel Corp (SMC), has San Miguel President Ramon Ang as its chairman. SMC , who is now planning to shift into infrastructure and heavy industry, has agreed to acquire a majority stake in Petron. They have an option from a unit of UK-based investment group Ashmore to acquire up to 100 percent in a local subsidiary called SEA Refinery Corp, who incidentally owns 50.1 percent of Petron.

SMC is the largest food and beverages conglomerate in Southeast Asia, they also own 34 percent of Manila Electric Company (Meralco), Philippine’s biggest power distributor.

Petron spokeswoman Virginia Ruivivar said, the board decision were made in a previous meeting and will be presented to the stockholders for approval.

Last Friday, Petron reported a net loss of P3.978 billion pesos ($81.5 million) in 2008, as against a net profit of 6.377 billion pesos in 2007. The company cited “extreme volatility” in crude oil prices last year as the cause of the big loss.

Petron president Eric Recto said that 2008 was a “very abnormal period for refiners, and many in the region reported reduced if not negative margins.” He is optimistic though they expect to return to profitability this year as oil prices now shows less volatility. “In fact, our January and February performance bears this out, “ Recto added.

Recto is confident that their partnership with San Miguel Corp. will help them on the “road to recovery.”