The Philippines could be sitting on one of its biggest energy-security opportunities yet, with Saudi Arabia offering to finance a massive oil storage facility that could hold as much as 50 million barrels—without requiring Manila to shoulder the construction bill.
The United Arab Emirates is also prepared to fund its own petroleum storage hub in the country, potentially giving the Philippines priority access to fuel when international supply chains are disrupted.
Department of Energy officials disclosed the offers during a Senate energy committee hearing as lawmakers pushed the government to move faster on plans to build a strategic petroleum reserve.
DOE Oil Industry Management Bureau Director Rino Abad said Saudi Arabia has indicated that it would cover the cost of developing its proposed storage facility.
The DOE has already submitted a concept note requested by the Saudi side, with the proposed facility carrying a target capacity of up to 50 million barrels. A newly created Philippine Strategic Petroleum Reserve team will handle the next stage of discussions, including the project’s possible location, timeline and documentary requirements.
The UAE has made a similar proposal.
Under the arrangement being discussed, the foreign-backed facilities could remain commercially operated and owned by their investors. The Philippines, however, wants provisions that would give it priority or reserve rights over petroleum stocks during emergencies.
That could prove crucial for an archipelagic economy heavily dependent on imported petroleum and vulnerable to geopolitical conflicts, shipping disruptions and sudden spikes in international crude prices.
Senate Energy Committee chairman Erwin Tulfo said the foreign offers should give the government even more reason to accelerate approvals and administrative requirements.
The UAE, Saudi Arabia and Japan have all been identified in recent Senate proceedings as foreign partners interested in helping develop petroleum storage and reserve capacity in the Philippines.
50 million barrels versus Manila’s 1-million-barrel start
The scale of Saudi Arabia’s potential investment becomes clearer when compared with the Philippines’ own initial strategic reserve plans.
The Philippine National Oil Co. is working on a government-controlled storage facility in Bataan, with the first tank expected to hold around one million barrels.
At estimated Philippine consumption of roughly 450,000 to 460,000 barrels per day, one million barrels would provide only slightly more than two days’ worth of consumption.
PNOC and the Maharlika Investment Corp. are pursuing the development of the reserve, with government estimates placing the investment at roughly P5 billion for each storage tank capable of holding 500,000 to one million barrels.
Energy Secretary Sharon Garin earlier said PNOC had started the necessary studies and allocated funding, with the government targeting at least one one-million-barrel tank by the end of 2027.
The government’s longer-term objective is far more ambitious.
The DOE has proposed eventually maintaining a strategic petroleum reserve equivalent to around 60 days of national fuel requirements, creating a much larger cushion against wars, shipping interruptions, price shocks and other international emergencies.
Japan also enters the picture
Japan is separately supporting Manila’s push for a strategic petroleum reserve.
PNOC has been coordinating with Japan’s Ministry of Economy, Trade and Industry on a feasibility study for a 15-million-barrel reserve in Bataan, with another facility of similar size being considered for Mindanao.
The study is targeted for completion by the end of 2026, while Japanese institutions are expected to provide technical expertise and capacity-building support based on Japan’s experience managing strategic petroleum reserves.
The combination of Philippine-owned storage and facilities financed by major oil-producing nations could eventually transform the country from a vulnerable fuel importer into a more strategically positioned petroleum storage center in Southeast Asia.
DOE officials have also pointed out that Saudi Arabia and the UAE have long been among the Philippines’ petroleum suppliers and possess export infrastructure that provides alternative routes away from the Strait of Hormuz—one of the world’s most critical oil shipping chokepoints.
For Manila, that makes the proposals more than simple foreign investments.
They could provide another layer of insurance should conflict or disruption suddenly choke traditional fuel supply routes.
Tulfo said the government should move quickly while major international partners are willing to put their own money on the table.
With Saudi Arabia potentially offering capacity many times larger than the Philippines’ initial government reserve, the challenge may no longer be finding investors willing to build the tanks.
It is making sure Manila can turn those offers into actual fuel security before the next global oil crisis hits.
