Shell unit shuts Philippine refinery as pandemic slashes margins
FILE PHOTO: Residents transport commuters and soda bottles on tricycles past a Shell petrol station in Las Pinas, Metro Manila, January 26, 2016. REUTERS/Erik De Castro
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Shell unit shuts Philippine refinery as pandemic slashes margins
FILE PHOTO: Residents transport commuters and soda bottles on tricycles past a Shell petrol station in Las Pinas, Metro Manila, January 26, 2016. REUTERS/Erik De Castro
MANILA (Reuters) – The Philippine unit of Royal Dutch Shell said on Tuesday it will permanently shut one of the country’s two oil refineries, blaming a pandemic-led slump in margins, with other regional closures likely to follow, according to analysts.
Pilipinas Shell Petroleum Corp said its 110,000-barrel-per-day Tabangao facility in Batangas province, which began operations in 1962, was no longer economically viable and would be turned into an import terminal.
Singapore’s complex refining margin, the bellwether in measuring profitability at Asian refineries, has been mostly negative since March prompting many refiners to cut output or temporarily shutter operations.
“We definitely see the possibility of more closures in Asia over the next 6-12 months,” said Mia Geng, consultant at FGE, adding that refineries in Japan, Australia and New Zealand could be likely candidates for closure.
“Given the uncertainties in demand and our subdued margin outlook, it would be challenging for those less complex and efficient refineries to continue running.”
The permanent closure of Tabangao comes after both of the Philippines’ refineries halted operations as coronavirus lockdowns pummelled oil demand.
“Due to the impact of the COVID-19 pandemic on the global, regional and local economies, and the oil supply-demand imbalance in the region, it is no longer economically viable for us to run the refinery,” Pilipinas Shell President and Chief Executive Officer Cesar Romero said in a statement.
The other local refinery, Petron Corp’s 180,000-bpd facility in Bataan province, has been on a scheduled turnaround since May for maintenance.
Energy Secretary Alfonso Cusi sought to allay concern over domestic fuel supply saying Pilipinas Shell is expected to fill its market share through imports of refined products.
But a Singapore-based gasoil trader said that imports may not happen anytime soon.
“I think they will import a bit more (gasoil) now. But demand is substantially disrupted due to the reoccurring COVID-19 situation.”
Wood Mackenzie research director Sushant Gupta said in a note the challenging environment would put pressure on weaker Asian refineries, particularly ones in mature markets, or with little or no integration with petrochemicals.
“We could see closures becoming a reality in many markets,” he said.
Pilipinas Shell booked a net loss of 1.2 billion pesos ($24.55 million) in the second quarter, narrower than its January-March net loss of 5.5 billion pesos. Its shares fell as much as 6.9% to 16.30 pesos, a one-year low.
Reporting by Enrico Dela Cruz; additional reporting by Florence Tan, Seng Li Peng, Shu Zhang and Koustav Samantha in Singapore; Editing by Ed Davies and Richard Pullin
Posted in: COVID-19, Oil, Oil Prices, Reuters, Royal Dutch Shell, Royal Dutch Shell Plc.
Tagged: Oil Prices · Royal Dutch Shell Plc · Shell
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Bogus Group: https://trinidadexpress.com/business/local/shell-takes-biggest-hit/article_ca33aea4-73d5-11eb-8a6e-ff41b564d669.html It's surely been proven that BG proven reserves were not actually proven and that Shell did inherit a 'pig in the poke'. The statement “Our preference is to deal with these arrangements, not in a clandestine way but there is a deeper confidentiality to it. We have these arrangements all over the world. We need to ensure that we maintain a degree of confidentiality but what I will confirm is that hundreds of millions of US dollars converts to billions of TT dollars and we have confirmed that Trinidad will benefit to billions,”beggars belief.
Bonus Group: It is not clear why the once upon a time VP Developments, Brazil is now VP Subsurface Excellence, given that the Brazil Asset under her stewardship spent at least five years down a giant rabbit hole using a corrupt workflow that resulted in a significant overbooking of reserves.
Bonus Group: On this day in 2016 the fate of BG Group, an Internet Cafe and Cappuccino Lifestyle company was sealed. See: https://www.shell.com/about-us/what-we-do/combining-shell-and-bg-a-simpler-and-more-profitable-company.html https://www.theguardian.com/business/2016/jan/28/35bn-shell-takeover-approved-bg-shareholders
Bonus Group: John,
Re:Links between Samuel Iskander and corruption
Dave Freeman currently Chief Operating Officer at privately owned Tailwind Energy and previously Upstream Technical Director (COO Office) at BG Group should be able to answer your question.
REPLY BY JOHN:
Many thanks, I will pass that information on to the investigative contact.
John Donovan: POSTED ON BEHALF OF AN INVESTIGATIVE CONTACT:
Newly former Shell executive Sami Iskander has been appointed CEO to London-traded energy company Petrofac, which is facing corruption allegations in Italy and from the U.K.'s SFO. The question is whether Iskander, who was one of only four executives from British Gas retained by Shell when the two merged in 2015, brings any baggage with him?
In general, what kind of a reputation does this man have in the London energy business community?
Bonus Group: Further to Bogus Group's post below, see: https://amp.theguardian.com/politics/2021/feb/02/sir-simon-robey-the-accidental-banker-adding-george-osborne-to-the-fold
Bogus Group: https://www.dailymail.co.uk/news/article-9211393/George-Osborne-lands-new-job-quits-roles-Evening-Standard-BlackRock.html The revolving door is still in motion. Links to Robey Warshaw, BG Group advisor on Shell deal, links to the “Notting Hill Set”, links to politicians, links to the authoress of “The Gatekeeper”, links to Brunswick, Shell/BG Group PR company, links to BlackRock….and others.
Bonus Group: https://www.aljazeera.com/amp/news/2021/1/29/dutch-court-orders-shell-to-pay-nigerian-farmers-over-oil-spills
Bonus Group: The long overdue structural reorganisation at Shell is rapidly approaching. No better place to start than within the Brazil Asset which has been propped-up for over ten years now by the same BG Group sycophants who have a proven track record of overbooking reserves on the basis of flawed functionall approved technical workflows. These individuals are still clinging desperately to their positions five years after the takeover of BG Group by Shell. Can it be that Shell cannot afford to move them on lest their poor work and lies be revealed? Get rid of them, truth and transparency are now required if not demanded in the Brasil Asset!
Bogus Group: More BG Group (Shell) executive 'turmoil'. Just love the "stepping down with immediate effect for personal reasons" euphemism.
Bogus Group: 330 job cuts in Aberdeen, with the new rhetoric by a Shell 'spokesperson', "this intends to ensure we are set up to thrive throughout the energy transition and be a simpler organisation". https://www.upstreamonline.com/exploration/330-job-cuts-oil-giant-shell-lays-out-losses-to-uk-team/2-1-942991
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