Energy Secretary Jose Rene D. Almendras on Friday raised the possibility that Shell Companies in the Philippines could further downscale its downstream oil business in the country specially after it recently disposed of its liquefied petroleum gas unit.
In a briefing, Almendras admitted that Shell was “not as happy as they used to” be in conducting business in the country, and acknowledged that should Shell downscale, this was a business decision the government could not stop.
Almendras added that Shell could have the same reasons as its fiercest competitor, Petron Corp., for their willingness “to let go of their refineries.”
“Petron is no longer happy that, [although] domestic fuel pricing is already one of the most transparent and lowest … there are still some people who agitate, alleging that oil companies are taking advantage of the public,” Almendras said, citing his conversation with Petron chair and CEO Ramon S. Ang.
“[Ang] also said people might think that this is such a lucrative business and that they are making a killing from it, but by making this offer [for the government to buy back the 180,000-barrel-per-day fuel refinery in Bataan], Petron is sending a very clear signal to those who want to take over the facility, including government, that it is open to that option,” the energy chief further said.
Also, there is now a question of whether it still makes economic sense to continue operating a refinery in the Philippines, if an oil company can readily buy finished products in the global market—which is what’s happening with the other oil players, he said.
Earlier, Royal Dutch Shell Plc announced that it would place the Philippines on its investment map as it continued to see growth opportunities in the country, despite the legal tussles and difficulties affecting its local downstream and upstream units.