Depressed market may delay Shell’s stock offering anew

The collapse in global oil prices that had been sending chills to shares value in stock markets may throw timelines up in the air again on the planned initial public offering (IPO) of Shell Philippines.

This was hinted by Energy Secretary Zenaida Y. Monsada when pressed by media on a definitive timeline on Shell’s stock offering.

While the Anglo-Dutch multinational oil firm has calculatedly targeted to undertake its debut in the Philippine Stock Exchange (PSE) this year, the energy chief noted that final plans “will depend on the market.”

She added that the oil firm, aside from complying with the Oil Deregulation Act’s mandate, will also have to ensure “the value it brings to shareholders.”

Market sentiments had been depressed, primarily for petroleum companies, given the lingering slide in oil prices sparked off by mega-glut in supply.

Shell previously eyed to finally pursue its IPO this year, counting value on recent completion of several projects that could potentially bring value to prospective stockholders.

These ventures include its refinery upgrade in Tabangao, Batangas; and the new depot in Mindanao to serve as its southern corridor product handling point.

Over at its upstream business segment, the $ 1.0 billion fresh capital investment for the Malampaya gas field was also completed last year. Such had been intended to shore up gas production from the field.

Nevertheless, the gas output from the Malampaya field is also linked to oil, hence, it is similarly afflicted by plummeting global prices.

Malampaya serves as the country’s only commercial gasfield to date, of which output fuels the requirements of about 2,700 megawatts of power capacity for the Luzon grid.

Its contract with the Philippine government will expire in 2024, and alternatives are still being explored on how to compensate capacity loss from gas output decline by that time.