DOE: Shell to conduct IPO this year

by Lenie Lectura - June 15, 2016
http://www.businessmirror.com.ph/doe-shell-to-conduct-ipo-this-year/

PILIPINAS Shell Petroleum Corp. has notified the Department of Energy (DOE) that it is definitely conducting an initial public offering (IPO) this year.

Energy Secretary Zenaida Y. Monsada said Shell Country Chairman Ed Chua informed the agency on Tuesday about the company’s IPO.

“They wrote to the DOE. They said the IPO is definitely this year. It has been approved by the Shell board,” said Monsada, who was referring to Shell’s parent company Royal Dutch Shell Plc.

IPO proceeds could be used to fund the company’s working capital and repay debts.

The size and the timing of the offer were not disclosed. There were no other details available.

When sought for comment, Shell Vice President for External and Government Relations Ramon del Rosario said in a text message, “We confirm that Shell is in the process of preparations for an IPO in accordance with its obligations under the Philippine Government Downstream Oil Deregulation Act. The nature and timing of the IPO is still being determined.”

Shell has reportedly tapped BPI Capital Corp. and JP Morgan as underwriters for this planned IPO.

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 from the effectivity of the law. This means Shell’s IPO should have been completed by 2002.

During the 2007 Asian financial crisis, Shell cited the volatile stock market in mulling over its IPO plans. There had been no legal action taken against Shell’s non-compliance either.

Monsada earlier cited projects that must be completed prior to the IPO launch. These include the refinery upgrade and its Mindanao facility.

She said the completion of these projects would signal Shell’s “sufficient stability.”

Chua said Shell completed last December 4, 2015, the upgrade of its refinery in Batangas.

The upgrade now allows Shell to locally produce a full range of products compliant with global Euro 4 fuel standards. Its Tabangao refinery is now producing 110,000 barrels of Euro 4 compliant fuel per day.

The Euro 4 standard is a globally accepted European emission standard for vehicles. The standards require fuel to have significantly low amounts of sulfur and benzene.

It also completed this year its P6-billion fuel import facility in Cagayan de Oro, aimed at supplying the energy needs of residents, motorists and other consumers in the Visayas and Mindanao.