Wednesday, October 10, 2007 Shell to launch IPO next year
PILIPINAS Shell Petroleum Corp. said its planned initial public offering (IPO) is expected to take place next year.
Ed Chua, country chairman of Pilipinas Shell, said they are just waiting for the completion of the study being conducted to determine if they will push through with the expansion of the refinery operations in the country.
“There's a possibility for the IPO next year,” Chua told reporters during the blessing and ceremonial commissioning of m/t Petro Celine on Tuesday.
Chua admitted that based on the initial report of the study, the upgrade of their refinery would cost them over than the US$1.5 billion budget they have projected.
“As I mentioned earlier, we have already finished the initial study. However the problem was instead of the US$1.5 billion estimate, it came close to US$3 billion because of the overheated market. What we done is that we looked into a more modest upgrade option first, and then possibly look at expanding the facilities afterwards. Modest could be less than a billion-dollar, but we still have to finish the study,” he said.
“The newer study is much complicated, because what we will do later on if we decide to expand should be non regrettable. I'm still waiting for the report of our technical people. I cannot really make a commitment whether the study will be finished this year,” he added.
Chua said they wanted also to take advantage of the bullish market. He, however, stressed that when they enter into an IPO they wanted the funds to be raised on the IPO be used the right way.
“The study is also linked to the IPO. It will be better to do an IPO and then there's something you'll use the money for. Essentially, the IPO is hinged on the upgrade and on the market. I mean the market is good,” he said.
Pilipinas Shell, a unit of the Royal/Dutch Shell group, conducted a review of its refinery operations in the Philippines to determine whether to shut down or expand its 110,000 barrels-per-day (bpd) refinery.
The Oil Deregulation Law passed in 1998 requires oil refiner to list 10 percent of its shares in the local stock exchange and Shell being the second largest oil company in the country should have gone public six years ago.
But the company asked the government to permit them to hold off the IPO citing as reason the poor market conditions.
Also present during the blessing of m/t Petro Celine were Energy Secretary Angelo Reyes together with the owners of Petrolift Inc.
m/t Petro Celine, a double hull oil products tanker, has a net tonnage of 1,672 and is equipped with all the latest safety, navigational and communications gadgets.
m/t Petro Celine is Shell’s second chartered double hull vessel after m/t Petro Cara which was commissioned last year. (MSN/Sunnex)
