Oil industry giant Pilipinas Shell Petroleum Corp. may increase its investments in the Philippines by as much as $1 billion, Finance Secretary Cesar Purisima said.
In a statement, Shell said it signed a deal with the Philippine government for a joint technical feasibility study of the planned Liquefied Natural Gas (LNG) terminal to be put up in Batangas.
President Aquino told reporters both Shell and Nestle discussed with him their plans to expand their operations that could provide more jobs.
"If you remember, we went to Batangas a while back, they were talking about their expansion. They'll be awarding the contract for the construction of the expansion for Malampaya by July 2012. It is projected to produce about 7,000 jobs," the President said.
"You will witness the signing of the study for the regasification plant. That seems to be a very good prospect. We discussed a little about the resources that are off Recto Bank," Aquino said.
Purisima said in his Twitter account that Shell would invest over $1 billion in various facilities.
As regards Nestle, the President said the company indicated it would want to reverse the balance of "sourcing from the Philippines versus sourcing from abroad."
"When we initially talked about it, it seems they were doing about 25 percent of their coffee needs from the Philippines. They want to get that by 2020, to between 75 to 80 percent of their needs. So currently, it's about 30 to 35 percent of their coffee needs are already sourced in the Philippines," Aquino said.
The President said Nestle invited Filipino officials to visit Nestle headquarters in Switzerland and their agriculture research facility. They also talked about their business process outsourcing operations already in the Philippines.
"They started out 60 then now they number... but there are 3,000 more or less direct employees already," Aquino said, adding he would also be inaugurating the Nestle plant that broke ground in October.
The President and Simon Henry, chief financial officer of Royal Dutch Shell Plc, witnessed the signing ceremony of the Memorandum of Understanding between Edgar Chua, Pilipinas Shell country chairman and Energy Secretary Jose Rene Almendras.
Henry said "this Memorandum of Understanding is indicative of our support to the Philippine government's aspiration to diversify its energy sources as embodied in its natural gas master plan."
The MOU calls for cooperation and coordination efforts between the Philippine government and Shell for a technical feasibility study which shall determine the viability for the development, construction and operation by Shell of an import and regasification terminal adjacent to its refinery facility located in Tabangao, Batangas.
Chua, for his part, said "we believe this feasibility study for an LNG terminal is a timely activity as it firmly supports the government's thrust of achieving energy security and promoting cleaner energy."
The proposed site of the LNG import and regasification terminal is adjacent to Shell's refinery facility in Tabangao, Batangas. The feasibility study is expected to be completed by 2012 with a "first gas" target date in 2016.
The Philippine government, through the DOE, is developing a natural gas master plan in order to diversify the country's energy sources to address the increasing demand for power and support the economic growth of the country.
Shell has a long-term relationship with the Philippines and continuously looks for opportunities to contribute to nation-building, it said in a statement.
Chua also informed the President that a technical study to evaluate possible modifications in the design and refining processes of Shells' refinery facility in Tabangao, Batangas was close to completion.
He explained the study aimed to determine the necessary changes in the facility that would allow Shell to meet the new Philippine National Standards (PNS) for 'Euro IV (PH)' grade diesel and gasoline set to take effect in 2016.
The signing of the deal was part of Aquino's two-day investment mission here.
On 5th June 2012, the President witnessed the signing of $1.03 billion in business agreements between British and Filipino companies.
Shell said Chua also had the opportunity to present to President Aquino an overview of the investment program that includes the next phases of exploration in the Malampaya natural gas field in northern Palawan.
Some 40 to 50 percent of fuel for Luzon's gas-fired power plants come from Malampaya natural gas, according to the Shell Philippines' website.
"In order to maintain the project's gas production and reliability, the Service Contract 38 consortium is investing an additional $1.04 billion for Malampaya Phase 2, which will entail drilling of additional wells by 2014," Shell Philippines said.
By 2015, Shell expects Phase 3 of its Malampaya operations to get underway. This involves the installation of a new platform.
"These developments are expected to maximize the recovery of gas from the reservoir and to maintain the level of gas production as the reservoir pressure drops and as the gas depletes," the Shell website also said.
Back in January 2012, Shell turned over to President Aquino a check representing $1 billion for the government's share of the earnings of the Malampaya deepwater gas-to-power project, a joint venture between the Philippine government and Shell Philippines Exploration B.V.
From the Malampaya proceeds, President Aquino sourced the funds to finance the Pantawid Pasada program for public utility jeepneys and tricycles, as well as the budget for the acquisition of Philippine Navy patrol ships purchased from the United States Coast Guard.
Shell's investment commitment is in addition to the $1.030 billion worth of investments pledged earlier when President Aquino met the executives of Glencore International Plc and its Philippine partner Philippine Associated Smelting and Refining Corporation (PASAR); Cebu Pacific Air, Rolls-Royce, and Royal Aero, GazAsia Ltd., and its Philippine partner the AsiaGas Corporation.
Nestlé said it would expand its current operations in the country. Nestlé Philippines employs 3,400 people in its manufacturing operations and 400 more in its backroom operations, which handle employee and financial services.
At 10 Downing Street, President Aquino asked British Prime Minister David Cameron to visit the Philippines as he sought more investments including in the Public-Private Partnership program of the country.
President Aquino told Cameron his administration was rolling out projects in the fields of infrastructure, energy, tourism, business process outsourcing and information technology. Read more in ABS-CBN
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