Shell turns Philippine Refinery into import terminal
Philippine Refinery will permanently shut down one of the two oil refineries in the country and blame a pandemic collapse in the margins, with other regional closures likely to follow, according to analysts.
Pilipinas Shell Petroleum Corp said that its 110,000-barrel-per-day Tabangao refinery in the province of Batangas, which started operations in 1962, was no longer economically viable.
Singapore's dynamic refining margin, the gauntlet for calculating profitability in Asian refineries, has been mostly negative since March, causing many refiners to slash production or temporarily shutter operations.
"We definitely see the possibility of more closures in Asia over the next 6-12 months," said Mia Geng, consultant at FGE.
The permanent closure of Tabangao will occur after both of the Philippines' refineries stopped functioning as coronavirus lockdowns of oil demand.
Pilipinas Shell had a net loss of 1.2 billion pesos ($24.55 million) in the second quarter, less than its net loss of 5.5 billion pesos in January-March. The shares fell as much as 6.9 percent to 16.30 pesos, a one-year low.
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