The Energy department is looking to prod Pilipinas Shell Petroleum Corp. to conduct an initial public offering (IPO) on the local bourse after the local refiner bared plans to upgrade its Batangas facility, an official said on Friday.
"We shall need to review the public listing of Shell. There have been no discussions on it yet so we will need to look into it," Energy Secretary Jose Rene D. Almendras said.
Section 22 of the Oil Deregulation Law states oil companies that operate refineries are required to do list "at least 10% of its common stock within a period of three years from the effectivity of the law or the commencement of its refinery operations."
The Oil Deregulation Law went into effect in 1998 but Shell has not made any move to list its shares, citing unfavorable market conditions.
Shell further said its IPO is contingent on its investment decisions for its refinery.
The Energy department said in 2010 it will not push Shell's IPO until its tax cases with the Bureau of Customs have been resolved.
The firm is charged with misdeclaration of importations and allegedly owes the government some P2.7 billion in taxes.
Last week, however, Mr. Almendras announced Shell intends to upgrade its refinery by next year.
"Shell is going to invest in the refinery. It's a final decision and I understand they will start early next year," said Mr. Almendras.
The upgraded refinery is expected to be in commercial operation by 2015 and will cost the firm around $100 million to $150 million.
This comes on top of some P3 billion the company intends to spend this year partly to expand its retail network according to earlier reports.
Shell has not yet given any further details on the planned upgrade of its refinery. It earlier said any additional investments in its refinery will allow Shell to meet new standards for Euro IV grade diesel and gasoline, which will take effect in 2016.
Shell operates the country's second largest refinery. The other oil refiner is Petron Corp.
Petron offered its shares to the public in 2004. It has since increased its public float to 14% to meet with new minimum listing requirements of the bourse.
Petron began a $1.8-billion refinery expansion project last year to be able to process different kinds of crude oil.
In the meantime, Shell is in the process of conducting a study to determine the feasibility of a liquefied natural gas receiving terminal in Batangas.
The firm is affiliated to the operator of the Malampaya natural gas project offshore Palawan.
Royal Dutch Shell, through its upstream unit Shell Philippines Exploration BV (SPEX), was reported to be readying another $1-billion infusion to increase the production and extend the life of the Malampaya deepwater project, earlier reports show.
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