Shell allots P750M for network expansion this year

Pilipinas Shell Petroleum Corp. is alloting some P750 million for the expansion of its retail gas station network this year, a ranking company official said.

Shell country chairman Edgar Chua told reporters that the company plans to put up at least 10 to 15 new stations nationwide and intends to spend around P50 million each station.

Chua said this investment is on top of the still undisclosed amount that would be poured in for the planned upgrade of its refineries that would allow the company to produce Clean Air Act (CAA)-compliant fuels.

The Shell executive, however, said the details of the refinery upgrade would still be finalized by the latter part of the year.

"We are still weighing several options. There are signs of good things to come in terms of upgrading our refineries to meet the CAA requirement. We will come up with the complete detail towards the end of the year," he said.

Though he declined to give the amount that would be allocated for the refinery upgrade, the Shell official said "it’s a major investment coming".

It would be recalled that Petron Corp., a close competitor of Shell, has announced that it will spend $300 million for its isomerization and hydrotreater projects, both CAA-related undertakings.

"It can be equal or much more (than Petron’s investment)," the official said.

After upgrading the refineries, Chua said they may also take into consideration the further expansion of its capacity.

Unlike Petron, Chua said Shell will concentrate on domestic operations. Petron is now focusing on exports to Asian market. Recently, Petron started exporting lubes products to Cambodia.

"We want to focus more on the local market. We will only deal in exports if there is surplus," he said.

Despite its optimism on the growth of the industry for the next years, Chua said they see flat income growth this year.

"We are seeing that we may have a repeat of our earnings last year," he said. Shell posted a net income of P5.7 billion last year.