INQUIRER FILE PHOTO
MANILA, Philippines—The Department of Energy is pressing Pilipinas Shell Petroleum Corp. to conduct its much delayed public offering, stressing that now is the right time to do so.
Zenaida Y. Monsada, director of the Oil Industry Management Bureau at the DOE, said in a letter to Shell that the oil company has until Friday (May 31) to submit an update of its initial public offering (IPO) plans, as mandated under the Oil Industry Deregulation Act of 1998.
Monsada noted that it has been nearly 15 years since the passage of the said law, which means that the mandated public offering of 10 percent of Shell’s common stocks has been long overdue.
Under the law, an oil company that is engaged also in the refinery business is mandated to offer to the public through the stock market 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.
Monsada further noted in the letter that the equity and financial markets are currently healthy and therefore potentially attractive to prospective investors of Shell.
For his part, Energy Secretary Carlos Jericho L. Petilla explained that the letter to Shell was a “reminder” for the oil firm to conduct its IPO because “it’s been a long time.”
According to Petilla, Shell has requested for a meeting with the DOE regarding the planned IPO next week. It remains uncertain whether Shell will be finally pushing through with its offering plans.
The energy chief only noted that despite these pending IPO issues, Shell remains “serious” with its planned liquefied natural gas (LNG) project in the Philippines, which would require some $1 billion in fresh investments, and with the $150-million upgrade of its 110,000-barrel-a-day refinery in Tabangao, Batangas.
Shell country chair Edgar O. Chua earlier said that there remained a number of factors that would become the basis for Shell’s decision whether or not to proceed with the IPO.
Apart from healthy market conditions, the conduct of IPO would be largely dependent on the resolution of the company’s tax cases that remained pending to date, Chua had said.