Now that the Department of Energy (DOE)’s budget for 2014 is up for approval before the House of Representatives, it’s a good time as any for our lawmakers to ask Energy Secretary Jericho Petilla why he has not taken more forceful action against Pilipinas Shell Petroleum Corp. (Shell) for its long-delayed initial public offering (IPO). Section 22 of RA 8479 or the 1998 Downstream Oil Industry Deregulation Act requires companies engaged in the oil refinery business like Shell to “make a public offering through the stock exchange of at least ten percent of its common stock.” The oil deregulation law (Section 24) also states that any individual or company that violates any provision of RA 8479—including the provision mandating an IPO—may be held criminally liable and penalized with imprisonment of three (3) months to one (1) year, plus a fine ranging from Fifty Thousand Pesos (P 50,000.00) to Three Hundred Thousand Pesos (P 300,000.00). If the oil deregulation law had been strictly enforced, Shell should have completed its initial public offering (IPO) in 2001. Yet, for the past twelve years, Shell has successfully evaded this IPO requirement. Of course, the delaying tactics of Shell would not be possible without the imprimatur and blessing of top government officials—from the former Arroyo administration up to the present Aquino government. Perhaps this explains why the DOE has been treating Shell with kid gloves on the issue of the oil company’s long-delayed IPO. Last May 2013, Petilla wrote a letter to Shell “reminding” it to comply with the law. “We are asking them what their [IPO] plans are. We cannot take any action at this point until we receive a reply from them,” Petilla explained. Susmariosep!! The DOE Secretary’s seeming deference to Shell is not surprising since Petilla’s position echoes the stand of the oil giant: that there is no specific deadline for the oil company to list its shares in the bourse. That’s because in 2001, Shell secured a ruling from the Department of Justice (DOJ) that the three-year period fixed by the oil deregulation law for oil refineries to make a public offering is not mandatory but merely directory (meaning, non-obligatory) which, in effect, gives Shell the option whether or not to list its shares. For more than a decade now, this questionable DOJ ruling has provided a convenient alibi for Shell to request—and for DOE to allow—the deferment of the required IPO for a variety of reasons, which Shell never seems to run out of. More than ten years ago in 2002, then Shell outgoing chairman Oscar S. Reyes claimed they could not push through with their planned IPO supposedly because the Philippine market was not ready for such an offering. In 2009, after being ordered by then DOE Secretary Angelo Reyes to submit its IPO plans, Shell country chairman Edgar Chua said they could not come up with a concrete plan on listing their shares because their IPO plan is tied to the Tabangao, Batangas refinery expansion program which they’re still finalizing. This even if two years earlier, Shell announced that it had already shelved plans to expand its Tabangao refinery due to increased costs. Not long after the Aquino administration took over a year in 2010, then DOE Secretary Rene Almendras vowed to review Shell’s compliance with the oil deregulation law’s IPO requirement. But Shell’s Chua claimed that the oil giant still hadn’t made a firm decision since it was still “reviewing the future of (their) refinery.” Fast forward to 2013. This time Shell wants more time to prepare for the IPO supposedly because it is “finalizing” (again?!) the study on upgrading its 110,000-barrel-per-day refinery in Tabangao, Batangas. But Shell’s many excuses don’t add up because in June 2012, during President Aquino’s state visit to the United Kingdom, Almendras already announced that Shell officials had committed to invest US$150-million to upgrade the Tabangao refinery. What’s more appalling is that when it comes to more profitable ventures like setting up the country’s only (rhymes with “monopoly”) import regasification terminal for liquefied natural gas (LNG), Shell can easily finish a feasibility study in a span of less than a year. However, when it comes to complying with our laws—and sharing their massive profits with Filipinos—Shell has no scruples about taking its sweet time “reviewing” or “finalizing” its refinery upgrade. If Petilla really isn’t playing favorites with Shell, he should immediately file criminal cases against the oil company’s top officials for its overdue IPO. That is, before no-nonsense Ombudsman Conchita Carpio-Morales trains her sights on this anomalous situation. Otherwise, Petilla might find himself facing graft charges for “giving (a) private party . . . unwarranted benefits (or) advantage . . . in the discharge of his official . . . functions through manifest partiality or gross inexcusable negligence.”
Posted on: Mon, 23 Sep 2013 23:53:32 +0000
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