Tax case hampers Shell’s plans for exploration in PH

/ 05:44 AM December 07, 2018

Despite the government’s drive to rev up exploration activities in the Philippines, Shell is holding off commitments for new upstream sector investments in the country until policies have been made clear and stable.

This is according to Cesar G. Romero, Shell country chair in the Philippines, who reiterated the oil giant remained interested in petroleum resources here. “We are prepared to invest but we need stability in government policies and clarity of the fiscal regime.”


He was referring to the unresolved matter of whether the Malampaya natural gas consortium, which includes Shell Philippines Exploration BV as project operator, owes the government income tax that has accumulated to at least P53 billion as the Commission on Audit (COA) insists.

The consortium, which includes Chevron Malampaya LLC and state firm PNOC Exploration Corp., disputes the COA’s ruling and the matter is currently pending before the Supreme Court and international arbitration proceedings.


Romero said the consortium had paid the government a total of about $10 billion as of August 2018.

But Romero said Shell would not move until the tax matter had been resolved.

The Department of Energy last month opened  to interested investors 14 prospective petroleum areas as the country’s demand for oil and gas continues to rise while local resources approach depletion.

On the downstream sector, Romero—who is also president and chief executive of Pilipinas Shell Petroleum Corp.—said the company had set a P4-billion capital expenditures kitty for 2019.

“We will be spending the same amount for the third year in a row,” he said.

The 2019 capex program includes the development and opening of 50 to 70 fuel stations across the country.

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