Shell told to proceed with IPO

MANILA, Philippines - The Department of Energy (DOE) is prodding Pilipinas Shell Petroleum Corp. to proceed with its much-delayed initial public offering (IPO), pointing out that market conditions are now ideal for a share sale.

Energy Secretary Carlos Jericho Petilla said the department has written Shell country chairman and president Edgar Chua to remind the oil refiner of its obligations to list in the local bourse as mandated under the Downstream Oil Deregulation Act of 1998.

“The market right now is ripe with all the upgrades and everything else that is why we are calling them,” Petilla told reporters yesterday.

In a May 14 letter to Shell, Zenaida Monsada, director of the DOE’s department’s Oil Industry Management Bureau, said Shell’s IPO is long overdue.

“While the opinion of the Department of Justice is that the three-year period under the oil deregulation law is not mandatory but prescriptive and will not prohibit an IPO to be conducted after the lapse of the said period, nearly 15-year period since the passage of the law is long overdue for Shell to implement the public offering of 10 percent of its common stocks,” Monsada said.

The oil deregulation law requires all oil refiners to sell at least 10 percent of their common stocks to the public.

In the letter, Monsada noted the rosy performance of the stock market.

“Given also that the equity/financial market environment in the country is currently healthy, which attracts potential investors, you are hereby requested to submit an update of your IPO plans,” she said.

In response, Shell requested for a meeting with DOE officials to update the department of the oil refiner’s plans.

The benchmark Philippine Stock Exchange index (PSEi) has already breached the 7,000-mark as investors continue to park their funds in the local bourse. The Philippine stock market was among the world’s best performing markets in 2012.