MANILA, Philippines - The Department of Energy (DOE) will press Pilipinas Shell Petroleum Corp. to push through with its initial public offering (IPO), the country’s top energy official said.
“We will insist because it is under the law,†said Energy Secretary Carlos Jericho Petilla.
He said while he is open to considering Shell’s reasons should it seek for an extension, Petilla said the DOE would also be looking into legal remedies if the company fails to fulfill its IPO obligations.
Shell earlier said it would start working on the IPO, possibly in two to three months, when it expects a final investment decision (FID) on its planned refinery expansion.
Shell country chairman and president Edgar Chua said the company’s IPO plans hinge on the results 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 early this month.
He said assuming the company is able to have an FID on the refinery within two to three months and market conditions are ripe, then it can start working on the public offering.
Asked on the directions of Shell’s refinery in the Philippines, Chua said the refinery supports energy security as well as many other industries.
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 reminded Shell of its obligations to list in the local bourse as mandated under the Downstream Oil Deregulation Act of 1998.
In its May 2013 letter the energy department 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,†the DOE said.
The Oil Deregulation Law requires all oil refiners to sell at least 10 percent of their common stocks to the public.