Shell external affairs manager Robert Kanapi said while the Department of Energy (DOE) has warned oil companies that they will be penalized if they continue to delay their IPOs, they have yet to "receive an advice from the DOE". DOE is now drafting an order to spell out the penalties for those that will refuse to undertake their IPOs.
"We haven’t gotten any advice from the Energy Department. We would want to see the official advice from the DOE before making any move," he said.
Nevertheless, Kanapi said they regularly submit a report to the DOE regarding the developments of their planned public offering. "If there is significant improvement in the outlook of the equities market, why not. But so far, there is none. However, if there would be potential ground for an IPO then we will definitely consider it," he said.
According to Kanapi, Shell’s financial advisor for its IPO, Salomon Smith Barneys continuously monitors the equities market here and abroad to periodically look at market conditions.
"Basically, the reason why we are not having our IPO yet is because our financial advisor says its not yet an opportune time to do it," he added.
Among the reasons cited by the financial advisor, Kanapi said, are: the continuing weakness in the local stock market; a volatile foreign exchange outlook affecting the view of the investors; and a new IPO may create an imbalance in the local stock market since equity investors may pull out some of their investments in the existing stock just to invest in the new IPO.
Section 22 of the Oil Deregulation Law of 1998 provides that oil firms engaged in the refinery business should offer to the public through the stock market at least 10 percent of their shares within three years from the effectivity of the law or by February last year.
Petron was listed at the PSE way back in 1994. It is partly owned by the government through the Philippine National Oil Co. (PNOC) and Saudi Aramco, the world’s largest oil producer. The remaining oil refiners in the country are Shell and Caltex.