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Friday, March 29, 2024

Shell seeks partners in renewables

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The Royal Dutch/Shell Group is in talks with potential partners for its venture into renewable energy, a top executive said.

Cesar Romero, Shell Companies in the Philippines president, said the group was in the process of setting up a renewable energy firm.

“Maybe, it should be ongoing by next year. We expect to have our real estate company… Because of the citizenship requirement, you need partners. When you set up a company with partners, it’s a bit tricky,” Romero said.

“Our vision is not anchored on setting up a generation facility. It’s being a renewable energy provider, which includes hybrid. It’s a blended energy provision with renewable component,” Romero said.

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He said Shell would provide “a combination of hybrid” renewable energy solutions which is not limited to solar installation. “The intention is to have a very good and differentiated offer.. We won’t be traditional solar installer,” he said.

He said Shell, being a foreign company, needed a local partner.  “We need a 60-percent Filipino partner…It’s challenging. Instead of us doing it on our own, you have to work with a partner, come up with a JV arrangement,” Romero said.

Romero said last year the company was in the ‘”scouting phase” for its renewable energy project in the Philippines.  “But globally, we have declared that as a global priority for us,” Romero 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.

Shell’s business in the Philippines primarily focuses on oil and gas exploration and downstream oil industry sector. Shell has been involved in the Philippine business sector for over 100 years. 

The company owns the second largest oil refinery in Batangas. Shell also operates the Malampaya deep-water-to-gas project in northwest Palawan.

“We’re considering that, either a holding company or if it can be housed somewhere. This is very much still in the early phase. It’s one of the priorities in the Royal Dutch/Shell Group that we want,” Romero said.

He said Shell Global formed a new organization called New Energy “that demonstrates how serious we are in the area.”

“We’re open-minded to partnering [in this venture]. We believe we need to make a contribution towards a more sustainable future… and part of that is our thrust towards going a  more lower carbon footprint,” Romero said.

“Oil will continue to play an important role…and as in particular, we are pushing gas extensively, as probably many of you know, we are the biggest player in gas. Related to that is this new energies group that we have just formed globally to start looking for opportunities in the RE space,” Romero said.

Romero said the company was looking at various business models and viable commercial arrangements.

“We want to be an energy solution provider, of which oil and gas and renewables all [form] part of that integrated [group]… Rather than just  being an oil and gas company, we want to be an energy solutions provider,” he said.

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