The board of global oil giant Royal Dutch Shell plc, the parent company of Pilipinas Shell Petroleum Corp. (PSPC), has given the green light to list the local component on the Philippine Stock Exchange (PSE), according to Department of Energy (DOE) Secretary Zenaida Monsada.
Edgar Chua, Pilipinas Shell country chairman, told the DOE last June 14 about the approval of the Shell mother company, Monsada told reporters in a chance interview at the DOE-Petron Euro 4 Fuel Economy Run.
“IPO [initial public offering of Shell]definitely this year, Now as to when this can be implemented, it depends on how fast the processing with SEC [Securities and Exchange Commission],” Monsada said.
Shell manufacturing communications and social performance manager Cesar Abaricia confirmed the statement of Monsada in a text message to reporters. “We can confirm that PSPC is in the process of preparations for an IPO in accordance with its obligations under the downstream oil industry deregulation act. The nature and timing of the IPO is still being determined,” Abaricia said.
The Energy department has been urging Pilipinas Shell to conduct an IPO in accordance with the terms of RA 8479 or the Downstream Oil Industry Deregulation Act of 1998 more than 18 years ago.
That law stipulates that oil refiners must publicly list at least 10 percent of their common stock on the local bourse within 3 years from the time of the law’s effectivity. This means that Shell’s IPO should have been completed by 2002.
Shell Pilipinas is one of the so-called Big Three oil majors, which collectively control nearly 70 percent of the domestic market for petroleum products. The only other refinery operator in the Philippines, San Miguel-owned Petron Corp., made its maiden listing in 2004, while Chevron Philippines shut down its refinery.
In an earlier interview, Shell country manager Chua said the listing has been delayed because of low oil prices, regulatory issues and unfavorable market condition.
In 2013, the DOE asked Pilipinas Shell to explain its failure over the past 15 years to comply with the Oil Deregulation Act, which requires refiners to undertake an IPO. At the time, Shell asked the DOE to give the oil firm until the end of 2014 to decide on the IPO.
No IPO has been conducted since then, with no legal action taken against Shell’s non-compliance.
Shell had said it needed more time to come up with a final investment decision and to determine how much capital it would need to raise for the expansion of its 110,000-barrel per day refinery in Tabango, Batangas.
Shell has started working on its $150-million expansion, which will include upgrading the refinery to produce Euro IV standard fuel products.