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DOE official: Shell to hold IPO ‘soon’

PILIPINAS Shell Petroleum Corp. is finally pursuing a longtime plan to conduct an initial public offering (IPO) after a delay of 13 years.

Department of Energy (DOE) officials said on Monday that Shell wrote the agency last month. The letter, said DOE Officer in Charge Zenaida Monsada, stated that 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,” Monsada said on the sidelines of the LPG Philippines forum on Monday.

DOE Director for Oil Industry Management Bureau Melita Obillo said Shell’s IPO will happen “next year” after an ongoing upgrade of its Bataan refinery is finished.

“Definitely not now,” Obillo said, referring to a possible IPO next year. The letter indicated that the IPO will happen “after work at its refinery is finished,” she added.

The letter was submitted to the DOE last month.

“Actually, they regularly submit their financial report every quarter to us. We asked for a more detailed explanation of the report of their analyst and so, Shell wrote a letter,” Obillo said.

The refinery upgrade, Obillo added, is scheduled for completion in the first quarter of 2016. Thus, the DOE official said, an IPO is expected to take place in the succeeding quarters.

Sources said Shell’s IPO could happen in the third quarter of next year. Company officials remain mum when sought for comment.

The DOE has been urging Shell for so many years now to conduct an IPO since it received the mandate under the Oil Industry Deregulation Act of 1998, which states that an oil company must list in the local bourse at least 10 percent of its shares within three years time from the effectivity of the law. This means that Shell’s IPO should have been completed by 2002. Petron Corp. was listed at the stock exchange prior to the passage of the law, while Chevron Philippines shut down its refinery.

During the 2007 Asian financial crisis, Shell cited the volatile stock market in mulling over its IPO plans.

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-4 fuel compliance.

In 2013 Shell asked the DOE to give the oil firm until the year-end to decide on the IPO.

Since then, however, no IPO has been conducted. There has been no legal action taken against Shell’s noncompliance either.

Shell was looking at expanding its 110,000-barrel per day (bpd) refinery 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.

An upgraded refinery will allow the oil firm to produce fuels that comply with the said standards.

Shell country chairman Ed Chua has been citing the poor market condition as one of the reasons for the delay.

Pilipinas Shell is the local unit of UK-based Royal Dutch Shell Plc.

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