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Sun Star Manila: Oil firm to improve refinery

Monday, June 18, 2007

INSTEAD of embarking on a full expansion of their processing plant, Pilipinas Shell Petroleum Corp. (PSPC), one of the oil giants operating in the country, has opted to upgrade its existing capacity.

“It is not in the same scale with that of an expanded refinery that they were looking at before. But they will have to upgrade the refinery. It will still be a multibillion-peso project however,” said Energy Secretary Raphael Lotilla.

Lotilla said the upgrading project was initially estimated to reach P15 billion and the study would be completed by September of this year.

“It will be a multibillion-peso investment or around P15 billion,” he said.

“The study they commissioned, instead of commissioning for a refinery expansion, they have refined that into a refinery upgrading study and I was told that it (study) will be available by the end of the third quarter of this year,” he added.

The Shell parent company Royal/Dutch Shell Plc. decided to postpone the expansion of its Tanbangao refinery in Batangas indefinitely due to the increase in the project cost.

Lotilla said the government is finding ways and measures to help Shell convince its parent company to reconsider and favorably decide on it (expansion project) to ensure its refinery facility will sustain its operations in the Philippines.

“But Shell’s expansion project will certainly come at the right time,” he added.

Local Shell officials have likewise been working to convince their principals to reconsider its decision in order for Shell to sustain its refining operations in the country.

Shell’s planned refinery expansion was previously estimated to cost around US$1 billion to US$3 billion.

Shell has a 137,000-bbl/d refinery, one of the largest foreign investments in the Philippines, and operates 1,000 Shell gas stations. Its market share is 33.3 percent. (MSN/Sunnex)

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