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CNNMoney: Shell Philippine Unit May Carry Out IPO Next Year

October 09, 2007: 05:46 AM EST

MANILA -(Dow Jones)- Pilipinas Shell Petroleum Corp., a unit of Royal Dutch Shell Group (RDSA), may finally push through with a long-delayed initial public offering of its shares next year, an official said Tuesday. “There’s a good possibility for an IPO next year,” Shell Philippines Country Chairman Edgar Chua told reporters, citing the strength of the Philippine stock market, which hit a record high Monday.

Under the 1998 oil industry deregulation law, oil refiners had to list at least 10% of shareholdings on the Philippine Stock Exchange within three years of the passage of the law.

Shell delayed listing, citing poor market conditions and uncertainty over the future of its Philippine refinery.

Petron Corp. (PCOR.PH) and Pilipinas Shell are the only oil refiners in the Philippines, after Chevron Corp. closed its refining facility in 2003.

Chua said another key factor determining Pilipinas Shell’s listing plans would be an ongoing study on whether the company will expand its Philippine refinery.

The facility has a capacity of 110,000 barrels a day and runs at a rate sufficient enough to cover between 60%-70% of the company’s daily needs. The rest is imported.

“The (expansion) study is linked to the IPO. Of course, it will be better to do an IPO and have something you’ll use the money for. Essentially, the IPO is hinged on the (results of the study) and on the market. Right now, the market is good,” Chua said.

He said an earlier study showed the expansion plan would cost close to $3 billion, twice the $1.5 billion the company estimated.

“The newer study is much more complicated because it will look at what we’ll do so that if we decide to expand, it will be at a non-regrettable cost,” Chua said.

He didn’t say when the new study would be completed.

-By Cecilia E. Yap, Dow Jones Newswires; (632) 848-5051; cecilia.yap@

  (END) Dow Jones Newswires
  10-09-07 0546ET
  Copyright (c) 2007 Dow Jones & Company, Inc.

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