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Shell shuts down Tabangao refinery and will soon become an import terminal

Shell thinks it's the best course of action as it trudges through the global pandemic.

Shell Tabangao oil refinery shuts down

After 58 long years of business presence, Pilipinas Shell Petroleum Corporation decided to permanently shut down its refining operations in the country. The said move was brought up by the disruptive impact of the coronavirus pandemic and the oil company’s choice to sustain its downstream oil market operations.

The Tabangao oil refinery in Batangas was constructed in 1960, and it will soon be converted into a world-class full import terminal. The facility had to suspend operations last May, then had to further extend the shut down for another month last June. This sad chapter has caused the company to suffer through heavy inventory losses. 

During the first quarter of 2020, Shell had a P5.5 billion net loss, followed by P6.7 billion the entire first half of the year. Despite that, the oil company managed to recover the second quarter by minimizing its losses to only P1.2 billion.

The financial whip caused by the health crisis has hindered the company’s technical capability and flexibility to manage and adapt to such disruptive conditions. 

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 viable for us to run the refinery.

With all that said, Shell will soon become an importer of all of its fuel products, as the company thinks that it's the best course of action as it trudges through the global pandemic. The company has yet to elaborate as to how it is to transform the Tabangao refinery into the said import facility. Notably, it could be somewhat similar to the company’s North Mindanao Import Facility in Cagayan de Oro City. 

Through this transition, Shell believes that it will help them be empowered financially during the new normal setup as brought by the amidst pandemic. 

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