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AFX Europe (Focus): Royal Dutch Shell Philippine unit says still studying options on refinery ops

Apr 05, 2006
MANILA (AFX) – Royal Dutch Shell PLC subsidiary Pilipinas Shell Petroleum Corp is still studying whether to shut down its refinery in the Philippines, a company spokesman said.
“Our studies are still ongoing and no decision has been reached. We will decide by the end of the year,” Pilipinas Shell spokesman Roberto Kanapi told XFN-Asia in a phone interview.
Local newspapers today reported, citing an unidentified industry source, that Pilipinas Shell is likely to keep its refinery here which has a capacity of 110,000 barrels a day, as refineries worldwide benefit from better margins amid steep oil prices.
Kanapi said there are still “a lot of considerations that have to be made” in deciding whether the company will keep its refinery but did not elaborate.
Pilipinas Shell has been considering options for its refining facility along with plans to list its shares here.
Under Manila's oil deregulation law, oil firms with refineries are required to sell at least 10 pct of their shares to the public. The law, passed in 1998, requires refiners to have gone public by early 2001.
But Shell has deferred its listing for years citing poor market conditions and while it reviews the viability of keeping its refinery.
Oil refiners have expressed concerns that the equal tariff rates for crude and refined oil products have reduced the profit margins of refineries, giving them no incentive to expand.
Refiner Petron Corp, the biggest of the three domestic oil firms which is co-owned by the Philippine government and Saudi Aramco, has been listed on the stock exchange even prior to the deregulation law. Caltex Philippines Inc, a unit of ChevronTexaco Corp, shut down its refinery in 2003.
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