MANILA, Philippines - San Miguel Corp., which is aggressively expanding into infrastructure, has agreed to buy ExxonMobil's 65% stake in Malaysian oil refiner Esso for $610 million.

San Miguel said it has signed an agreement with ExxonMobil for the acquisition, which includes the latter's other downstream oil subsidiaries in Malaysia -- ExxonMobil Malaysia SdnBhd and Exxon Mobil Borneo SdnBhd.

San Miguel has diversified its portfolio in recent years, spinning off its traditional brewing business and moving into areas such as domestic power, telecommunications, infrastructure, and energy.

It owns the Philippines' largest oil refiner, Petron Corp., which has a capacity of 180,000 barrels per day (bpd) and a network of over 1,700 service stations nationwide.

Esso in Malaysia operates a refinery located in Port Dickson on the west coast and a chain of 560 retail stations across the country.

Built in the 1960s at an initial cost of 50 million ringgit, the Port Dickson refinery has a processing capacity of 88,000 bpd, but it averaged 45,000 bpd in 2010, according to the company's 2010 annual report.

"ExxonMobil’s Malaysian downstream business is attractive to San Miguel given that there is plenty of room to move up the value chain by upgrading refinery capabilities," said San Miguel President and Chief Operating Officer Ramon Ang.

"Our plan would be to upgrade the Port Dickson refinery so that it can make use of a wider variety of crudes, and produce higher-value products," Ang added.

The refinery presently produces gasoline, diesel, liquefied petroleum gas, jet fuel, kerosene and low-sulfur waxy residue.

With the sale, San Miguel said US-based ExxonMobil will now focus on other operations in Malaysia covering chemicals, lubricants and global business support.

Meanwhile, Ang said San Miguel's acquisition in Malaysia "provides us with a unique opportunity to expand our participation in the regional oil and gas sector."

Cash-rich San Miguel said on Tuesday it had received proceeds worth P13 billion from a share purchase deal covering a portion of its stake in Manila Electric Co. It sold the unit to its food arm, San Miguel Pure Foods, giving the parent fresh funds for new acquisitions.

San Miguel shares dropped 1.34% to P125 apiece at market close on Wednesday, before the deal was announced. In Malaysia, shares of Esso fell 0.2% to 4.33 ringgit.