Surigao del Sur Rep. Johnny Pimentel is hoping that Pilipinas Shell Petroleum Corp. will not voluntarily delist its shares from the Philippine Stock Exchange (PSE) despite the permanent shuttering of its 110,000 barrel per day oil refinery in Batangas City.
“We hope that Shell will stay listed, for the sake of its minority shareholders, especially those who bought into the company’s initial public offering (IPO),” Pimentel said.
The Government Service Insurance System (GSIS) owns 15,823,930 shares in Shell, while the Social Security System (SSS) holds another 7,764,300 shares, Pimentel said.
Shell currently supplies 20 percent of the local market for petroleum products, according to the Department of Energy (DOE).
The Philippine unit of The Hague, Netherlands-based Royal Dutch Shell plc sold 291 million shares to the public at P67 per share in 2016, in compliance with Republic Act 8479, or the Downstream Oil Industry Regulation Law of 1998.
The law required any entity engaged in the oil refinery business to make a public offering of at least 10 percent of its common stock within three years from the effectivity of the law (or within three years of the start of refinery operations).
“Congress specified the provision pursuant to the mandate of the 1987 Constitution for the State to encourage private enterprises to broaden their base of ownership,” Pimentel said.
“Shell’s case is different because it was compelled by law to go public. It did not voluntarily conduct an IPO,” Pimentel pointed out.
“In fact, we recall that Shell dillydallied about going public and managed to defer its IPO for 14 years only because Congress did not specify a penalty if oil refiners failed to go public within the prescribed deadline,” Pimentel said.
Shell eventually conducted its IPO after the DOE during the Aquino administration called the company’s attention to its delayed listing.
“In the case of Petron Corp., it voluntarily conducted an IPO of its shares in 1994, or long before the passage of the 1998 law,” Pimentel said.
Shell closed down for good its 58-year-old refinery in August last year and converted it into an oil import terminal.
Petron has also suspended the operations of its 180,000 barrel per day oil refinery in Limay, Bataan to minimize losses due to deteriorating margins.
Both Shell and Petron have found it more profitable to import ready-to-use petroleum products into the country, instead of refining crude oil into diesel, gasoline, LPG, jet fuel, fuel oil and kerosene, among others.
Pimentel earlier sought a congressional inquiry into the impact of the decommissioning of the two oil refineries on the country’s long-term energy security. (Vina de Guzman, bistadodailynews.net)