Shell looking for local partner in renewable venture
Royal Dutch Shell Plc. expects to set up a renewable energy company in the Philippines in partnership with a local partner within the year, a top executive said over the weekend.
“Before the end of the year or earlier, we are hoping the company is already there. So by January we can start approaching customers or earlier,” said Pilipinas Shell Petroleum Corp. president and chief executive Cesar Romero.
“Renewables is something we’re excited about similar to LNG [liquefied natural gas]. Everybody knows that the country is suitable for RE. We have a lot of sun and we’re island based. We’re really excited about the prospects of renewables in the country,” Romero said.
He said the company would need a local partner under the 60-40 ownership rule of the Constitution. Shell is a British–Dutch multinational oil and gas company headquartered in the Netherlands and incorporated in the United Kingdom.
“What makes it a little bit tricky for us is there’s a 60-percent nationality requirement. Therefore, we can’t do it just on our own being classified still as a foreign company despite us being here for 104 years. Therefore we need to work with a partner by its very nature. We have to look for a 60-percent local partner,” Romero said.
Romero said the Shell Group was committed to “participate and enter the renewable sector in the Philippines.”
Romero said the company had not yet come out with the partnership structure and commercial arrangement for the renewable energy venture.
He said Shell Group had yet to decide on whether to invest in greenfield renewable energy projects or acquire existing projects.
“We have not gone to that level of discussions. Our priority is setting up of the company. We cannot do anything without the company in place, with 60-percent Filipino entity,” he said.
He said potential partnership should have an “alignment of values.”
“We are a firm believer of our business principles, good governance, talent development secondly. A company that also believes in our aspiration for renewables in the country to help grow the islands and improve air quality,” he said.
Shell announced plans to venture into renewable energy in December 2016 which would signal a new phase in its business in the Philippines.
“Our vision is not anchored on setting up a generation facility. Being a renewable energy provider, it includes hybrid. It’s a blended energy provision with renewable component,” Romero said earlier.
He said Shell Group would provide “a combination of hybrid” renewable energy solutions, and not just solar installation.
“The intention is to to have a very good and differentiated offer.. We won’t be traditional solar installer,” he said.
Romero said the company was in the ‘”scouting phase” for renewable energy projects in the Philippines. “But globally, we have declared that as a global priority for us,” he said.
“[We are] scouting for RE, in general. We’re prepared to use a number of platforms depending on what maybe commercially viable opportunity. Common start is solar but then you can explore various combinations―solar, gas, hydro, usually very location-dependent. [It would be a] combination with gas, or even diesel genset, [but it] depends on what is suitable,” he said.