A lawmaker on Monday said he hoped Pilipinas Shell Petroleum Corp. will remain a public company after it permanently shut down its oil refinery in Batangas.
Surigao del Sur Representative Johnny Pimentel said in a statement that Shell should remain listed on the Philippine Stock Exchange (PSE) for the sake of the minority holders, which include state-owned pension funds.
The company, which supplies about a fifth of the petroleum products in the country, has shut down its 58-year-old, 110,000 barrel per day oil refinery in Batangas City.
The company converted it into an oil import terminal.
Pension funds Government Service Insurance System owns 15.82 million shares in Shell or about 5.4 percent, while Social Security System (SSS) holds 7.76 million shares or about 2.6 percent.
The Philippine unit of Royal Dutch Shell plc sold 291 million shares to the public at P67 per share in 2016, in compliance with Republic Act 8479, or the Downstream Oil Industry Regulation Law of 1998.
The law required an entity engaged in the oil refinery business to go public within 3 years from the effectivity of the law or within three years of the start of refinery operations.
“Congress specified the provision pursuant to the mandate of the 1987 Constitution for the state to encourage private enterprises to broaden their base of ownership,” Pimentel said.
“Shell’s case is different because it was compelled by law to go public. It did not voluntarily conduct an IPO [initial public offering]. In fact, we recall that Shell dillydallied about going public and managed to defer its IPO for 14 years only because Congress did not specify a penalty if oil refiners failed to go public within the prescribed deadline,” he said.
Shell eventually conducted its IPO after the Department of Energy during the Aquino administration called the company’s attention to its delayed listing.
Petron Corp., meanwhile, is already a public company since 1994, or 4 years before the passage of the 1998 law.
Petron has also suspended the operations of its 180,000 barrel per day oil refinery in Limay, Bataan, to minimize losses due to deteriorating margins.
Both companies have found it more profitable to import ready-to-use petroleum products into the country, instead of refining crude oil into diesel, gasoline, LPG, jet fuel, fuel oil and kerosene, among others.
Chevron Philippines, meanwhile, has no refinery and just imports its goods.