Shell to ink partnership with local partner in 2019

Global energy giant Royal Dutch Shell is targeting to close a partnership with a local firm to start pursuing renewable energy investments next year, a ranking official said.

Shell is keen on investing in the renewables sector, but it needs to partner with a local firm to hurdle the 60-40 foreign ownership clause under the Constitution, country manager Cesar Romero said.

“We have decided that we want to participate and enter the renewable sector in the Philippines. That one is clear,” he said.

“What makes it a little bit tricky for us is there’s a 60 percent nationality requirement, therefore, we can’t do it just on our own being classified still as a foreign company despite being here for 104 years,” Romero said.

Shell is currently in talks with prospective partners for the joint venture company and is targeting to close a deal within the year.

“It is a question of being able to conclude negotiations with the 60 percent,” Romero said. “Before the end of the year or earlier, we hope to set up the company so January we can start approaching customers.”

Once the joint venture is set, investments in the sector will come easy. The group is looking at any technology in off-grid islands.

“We’re very open [to invest in any kind of technology], especially to what is most appropriate in a particular location,” Romero said.”We have not shortlisted [locations] but our typical islands with high power… remain highly on our radar.”

In May 2016, Royal Dutch Shell announced the establishment of a separate division, New Energies, to invest in renewables for a future beyond fossil fuels amid technological changes and climate change policies.

Following the group’s global thrust to go beyond fossil fuels, Shell’s local unit has started to scout for opportunities in the renewable energy sector.