MANILA, Philippines – The Department of Energy (DOE) will once again call the attention of Pilipinas Shell Petroleum Corp. (PSPC) for failing to enlist at the Philippine Stock Exchange (PSE), an undertaking the Philippine government required oil refineries to comply with more than a decade ago.
“We will ask them again the status of its IPO (initial public offer) plans,” said DOE Secretary Carlos Jericho Petilla.
This is not the first time DOE had urged Shell to conduct an IPO since the passage of the Oil Industry Deregulation Act of 1998, a law mandating oil companies to list at least 10% of their shares at the PSE.
In June 2013, PSPC vice president Roberto Kanapi explained that before it could proceed with the IPO, it would need to finish its study on its refinery upgrade in the light of the completion of the Euro VI emission standards in the country.
PSPC, the local subsidiary of Royal Dutch Shell Plc, intends to raise funds through the IPO to expand its refinery in Tabangao, Batangas.
However, it would need to await for a final investment decision which would come from its parent company.
Three major players of the downstream oil industry – Petron, Pilipinas Shell, and Caltex – weren’t quite successful prior to the passage of the law as they all suffered during the 2007 Asian financial crisis.
Petron Corporation was on the stock exchange before the law was passed, while Chevron Philippines shut down its refinery.
Earlier, DOE insisted that prevailing conditions are ripe for Shell’s initial public offering, although a Justice Department opinion said Shell is not bound to list itself at the PSE.
But Zenaida Monsada, director of the Oil Industry Management Bureau of the DOE, described the IPO as 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% of its common stocks,” Monsada said. – Rappler.com