Pilipinas Shell Petroleum Corp. on Thursday disclosed that it will permanently shut down its oil refinery facility in Batangas and transform it into a world-class full import terminal.
“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 stated in a disclosure to the Philippine Stocks Exchange.
The firm said the decision to transform the Tabangao oil refinery into a full import terminal is to optimize its asset portfolio. It also aims to “enhance its cost and supply chain competitiveness”.
It noted that the cost of importing oil is “lower than or almost equal to” the cost of refining the commodity.
In the first quarter of the year, Pilipinas Shell reported a net loss of PHP5.5 billion. Losses were lower in the second quarter at PHP1.2 billion.
In a statement, Energy Secretary Alfonso Cusi expressed his disappointment on the permanent closure of one of the two oil refineries in the country, but he noted that this should not impact the supply in the country as Shell Pilipinas will import refined products.
“I respect the decision of the Shell management changing their oil downstream business model to adapt to the existing market and economic situation,” Cusi said. “What saddens me is the plight of the workers that will be displaced due to the closure. I hope they will find employment with the other industry players”.
Source: Philippines News Agency