MANILA, Philippines - Pilipinas Shell Petroleum Corp. will start working on a possible initial public offering (IPO) in two to three months when it expects to finalize a final investment decision (FID) on its projects in the Philippines, particularly its planned refinery expansion.
In an interview with reporters, Shell country chairman and president Edgar Chua said the company’s IPO plans hinge on the result of a study on its refinery expansion.
“That’s dependent on whether we get the FID, which is (expected) anytime soon…probably within the next two or three months to get that. Then we start working on the IPO,†Chua said.
He said that if assuming the company is able to have a final investment decision on the refinery within two to three months and market conditions are ripe, then it can start working on the public offering.
“We have to comply with the law,†Chua noted.
Asked on the directions of Shell’s refinery in the Philippines, Chua said the refinery supports energy security as well as many other industries.
“We have so many Filipinos working in the refinery here and overseas so that’s a good technology,†he said.
The oil company is looking at expanding its 110,000-barrel per day (bpd) refinery in Tabangao, Batangas to meet new fuel standards that will take effect in 2016.
Euro 4 is a globally accepted European emission standard for vehicles. The Euro 4 standards require fuel to have significantly low amounts of sulfur and benzene.
Last year, the DOE has sent a letter to Shell reminding the oil refiner of its obligations to list in the local bourse as mandated under the Downstream Oil Deregulation Act of 1998.
In a May 2013 letter to Shell, Zenaida Monsada, director of the DOE’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 PSPC to implement the public offering of 10 percent of its common stocks,†Monsada said.