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Manila Standard Today: ‘Shell IPO a matter of right timing’

By Alena Mae S. Flores

Pilipinas Shell Petroleum Corp. is still waiting for the “right timing” before conducting its planned initial public offering, a company official said.

Shell country chairman Edgar Chua said the IPO hinged on the company’s oil refinery expansion plan in Batangas.

Chua said talks were still ongoing between Shell and the Philippine Stock Exchange on the IPO plan. He said the company was awaiting the outcome of a second study on the refinery expansion before proceeding with the IPO.

“We are telling them [PSE] that it is still a matter of right timing,” he said.

“The first factor is that we need to see a conducive market condition which is present now. The second factor is the question of whether we are here to stay because we do not want to offer our shares to the public and then close down our refinery. We do not want to put at a disadvantage the small shareholders that will buy our shares,” he said.

Shell for the past few years has been studying the possibility of undertaking a huge refinery upgrade or shutdown of its refinery in Batangas.

“Closure of our refinery is always an option we are looking at, depending on the result of our new study,” Chua said.

He said the latest study commissioned by Shell was a “totally different study.”

“This will finally determine if we will upgrade our refinery or shut it down. If we will not upgrade, we will definitely shut down our refinery because we can’t stay like this. We need to anticipate the need of the future and the competition,” he said.

If Shell pushes through with the upgrade, the company will need to invest about $300 million.

Chua said Shell expected to complete the said study by the third quarter of the year.

Energy Secretary Raphael Lotilla said he “hoped [Shell] will do an IPO because it’s a good time to do an IPO.”

The stock market remains bullish this year with many companies conducting an IPO.

 http://www.manilastandardtoday.com/?page=business4_july2_2007

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