Shell IPO happening in 2016?

MANILA, Philippines – Energy officials said Monday, August  24, that after a 13-year delay, Pilipinas Shell Petroleum Corporation is finally pursuing its longtime plan to conduct an initial public offering (IPO). (READ: Shell IPO late by 12 years now – DOE)

Speaking on the sidelines of the LPG Philippines forum Monday, Department of Energy officer-in-charge Zenaida Monsada said the maiden public offering would finally happen soon.

“They informed us that they would already undergo an IPO. As for the schedule, I can’t exactly remember,” she said.

Melita Obillo, DOE Director for Oil Industry Management Bureau cited a letter from Shell in July saying that Shell’s IPO will happen “next year” once the upgrade of its Batangas refinery is finished.

The refinery upgrade is scheduled for completion in the first quarter of 2016, Obillo said. Thus, an IPO is expected to take place in the succeeding quarters.
 
Company officials refused to comment though.

The DOE has been urging Pilipinas Shell, the local unit of UK-based Royal Dutch Shell Plc, to do an IPO since it received the mandate under the Oil Industry Deregulation Act of 1998. Under this, an oil company must list in the local bourse at least 10% of its shares and within 3 years from the effectivity of the law. Shell’s IPO should have been completed by 2002.

Petron Corporation was listed at the stock exchange prior to the passage of the law, while Chevron Philippines shut down its refinery here.

Reasons for delay

During the 2007 Asian financial crisis, Pilipinas Shell cited the volatile stock market as a reason for its reluctance to do an IPO then. 

Following the Department of Environment and Natural Resources’ 2010 directive on the upgrade of vehicle emission standards on January 1, 2016, Shell started studying the Euro IV fuel compliance. Euro IV is a globally accepted European emission standard for vehicles. An upgraded refinery will allow the oil firm to produce fuels that comply with the said standards.
 
In 2013, Shell asked the DOE to give the oil firm until the end of the year to decide on its IPO. – Rappler.com