A TOP Department of Energy (DOE) official said oil giant Shell has affirmed it would push through with plans to go public as well as extend its operatorship of the Malampaya gas platform.
DOE officer in charge Zenaida Monsada told reporters Shell officials have informally advised the department of plans to offer company shares to the public, which is mandated by the country’s oil market liberalization law.
“They have not sent us a formal letter, but they indicated that they have clearer plans for an IPO (initial public offering),” Monsada said. “The indications are—soon, they will get listed.”
The DOE OIC said she had a meeting “very recently” with Shell officials on the matter.
While waiting for Shell’s definitive stance on the matter, the DOE has also advised the major oil firm to submit a formal proposal on its request to continue operating the Malampaya gas platform after its license expires in 2024.
“We would like to see what their plans are. We cannot just extend without a plan and concessions. We want to see why we should extend, how much production they expect (beyond 2024) and how they want to achieve it,” Monsada said.
While nothing is on paper yet, the DOE can thus talk to other interested parties, she said.
The department has not received offers, so far. San Miguel Corp., whose president and COO Ramon Ang has expressed interest in Malampaya, has not made a formal bid for the asset.
Meanwhile, Shell Philippines Exploration B.V. (SPEX), which represents the consortium operating the Malampaya gas platform, and the Philippine National Oil Company-Exploration Corp. (PNOC-EC) are jointly selling their gas volume entitlements under Service Contract 38. The awarding is set to be announced in November 2015.
The banked gas is set to be extracted by the end of 2015 and delivered to the winning bidder beginning Jan. 1, 2016 up to Feb. 23, 2024.
The total volume of banked gas may be able to run a 400 megawatt (MW) power plant until 2024, around the same time the service contract for Malampaya will end.
Under the Oil Industry Deregulation Act of 1998, an oil firm with a refinery must offer 10 percent of its shares to the public. Shell had deferred its IPO plans several times because of the volatile stock market, which took a hit beginning with the 2007 Asian financial crisis.
Since it has a refinery in the country, Shell said it would also have to study Euro IV fuel compliance standards before firming up IPO plans. The Department of Environment and Natural Resources earlier issued higher vehicle emission standards by Jan. 1, 2016.
If Shell abandons plans to upgrade and offer shares to the public, the company may go the way of Chevron, which chose to shut down its refinery and is now simply importing all of its fuel products in the country. Petron, another major oil firm, is already listed in the PSE.
Earlier this year, former Energy Secretary Carlos Jericho Petilla said he had met with Shell country chair Edgar O. Chua and was assured that the oil firm has long-term plans for the Philippines, including an IPO.
Among such plans is to finish the $150-million expansion of Shell’s 110,000-barrel-a-day refinery in Tabangao, Batangas province by end-2015.