By Juzel L. Danganan
MANILA, Feb. 27 (PNA) — Pilipinas Shell Petroleum Corp. (PSPC’s) President Ed Chua sees the company’s net loss for 2014 will likely be bigger than the Php 1.2-billion losses in 2013 due to the drop in oil prices.
While Chua admitted he did not have the audited financial results yet, he said he expects the profits to be bad.
He noted that 2014 was very bad due to the fall of oil prices at USD 50 from June to December.
”(2014 was) very bad, because we have an inventory… The value dropped by 50 dollars from June, July to September,” he said.
Chua cited that if the company has 5 million to 6 million barrels of inventory, it will equal to a loss of USD 300 million.
“Our prices are based from last week, but if Shell has an inventory of two months – then I’m still selling based on last week’s prices,” Chua told reporters.
Meanwhile, Chua bared that the company has not submitted a plan regarding the relocation of its Pandacan oil depot.
”We have no relocation plans, people think that if we close, we will relocate somewhere, we will not,” he said.
He said that the people working in the depot would lose their jobs upon its closure, the jet-fuel supply at the Ninoy Aquino International (NAIA) would also be disrupted.
Chua points out that despite the increase on its operating costs, oil prices would still depend on market forces,.
”Our costs will increase, but the prices will depend on the market,” he said.
The PSPC president said the firm filed a motion for reconsideration (MR) with the Supreme Court (SC) last Jan. 5, arguing that the oil depot does not provide environmental or health damage.
He wanted experts to decide whether the oil depot provided health and environmental risks, which did not happen during hearings in former Chief Justice Renato Corona’s term.
Until the SC issues a final decision, Shell will continue its depot operations, Chua said.
He said Shell did not want to relocate due to the lack of relocation site and the high expenses.
However, Chua defended the local government, saying they’re not at war with them and had very good relations.
Chua said PSPC would be the first to close down the facility (depot) if it was unsafe.
”It’s a safe facility. If it’s unsafe, we will be the first to close it down. We’ve done a lot like that, where because it was unsafe, either because of crime or security – we’ve closed down the facility,” he said. (PNA)