Shell's Philippines Unit to Suspend Refinery Operations for 1 Month

Reuters, May 6, 2020

Pilipinas Shell Petroleum Corp said on Tuesday it will shut down its 110,000-barrel-per-day Tabangao refinery in the Philippines for one month from mid-May as the coronavirus pandemic has hammered oil demand.

In response to the drastic decline in local product demand and the significant deterioration of regional refining margins brought about the COVID-19 pandemic, the company will temporarily shut down its refinery operations for approximately one month starting mid-May 2020,” the unit of Anglo-Dutch energy firm Royal Dutch Shell said in statement.

Pilipinas Shell said it will continue to comply with the government’s minimum inventory requirement during the shutdown of the refinery in Batangas City, south of the capital Manila.

Manila and some parts of the main island of Luzon as well as a few other Philippine provinces will remain under “enhanced community quarantine” until May 15 to curb the coronavirus spread.

The temporary shutdown will help insulate the company from further potential drops in refining margins and will also aid in its cash conservation initiatives,” it said, adding that it can switch to importation of petroleum products if necessary.

Philippines President Rodrigo Duterte on Monday temporarily increased tariffs on imported crude oil and refined petroleum products to fund measures aimed at mitigating the economic impact of the coronavirus outbreak.

The Tabangao facility is one of the two refineries in the Philippines. The country’s largest refiner Petron Corp operates a 180,000 barrel-per-day facility in Bataan province, also in Luzon.

(Reporting by Enrico dela Cruz; Editing by Kim Coghill)

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