Royal Dutch Shell’s downstream oil refining and marketing unit Pilipinas Shell Petroleum (PSPC) has announced that it will permanently shut down its Tabangao Refinery in Batangas, the Philippines, and convert it to a full import terminal.
The company noted that the decision will help it to optimise its asset portfolio and boost its cost and supply chain competitiveness.
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The move is also expected to boost the financial resilience of Pilipinas Shell due to the significant challenges posed by the Covid-19 pandemic in the global refining sector.
The Tabangao refinery started operations in 1962. It ceased operations in late May to help protect Pilipinas Shell from a further decline of refining margins, as well as to enable the company’s cash saving efforts.
Pilipinas Shell president and CEO Cesar Romero said: “The regional refining margins, which have been weak for some time due to the oil supply/demand imbalance in the region, have worsened due to demand destruction from the Covid crisis.
“As such, it is no longer economically viable for us to run the refinery. It is with a heavy heart that we announce the cessation of oil refining activities in Tabangao.”
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By GlobalDataAccording to the Shell subsidiary, the demand for fuel products has not returned to normal. Many businesses are closed or operating at low capacity while travel remains restricted because of the global lockdowns.
Romero added: “As we embark on this new exciting chapter for Pilipinas Shell, we wish to reiterate that we are here to stay, and we remain to be a partner in nation-building. We have been serving Filipinos for 106 years and we intend to continue to do so for the next 100 years or more.”
In January, Pilipinas Shell reportedly aimed to completely automate fuel marking at its Tabangao refinery.
