Shell sets steady P4-billion capex

MANILA, Philippines — The local unit of energy giant Royal Dutch Shell has maintained the same level of capital spending for next year to support and expand its operations in the country, according to its top official.

Pilipinas Shell Petroleum Corp. (PSPC) president and chief executive officer Cesar Romero said they are keeping the capital expenditure budget at the P4-billion level in 2019.

“For PSPC, capex remains consistent at P4 billion,” Romero said, noting the company has kept an average of P4 billion a year spending in the past three years.

Of the total, P2 billion will be allocated for the construction of 50 to 70 stations, P1 billion for the refinery operations and P1 billion for the supply side spending.

“One thing we promised is predictability and consistency,” he said.

Next year’s capex is focused on maintaining the company’s market share as the second largest oil player in the country.

“We’re watching out for our market share which is at 33 percent,” Romero said.

Based on government data, PSPC captured 18.5 percent of the total market demand as of the first half.

For this year, the oil firm has set the capex at P4.28 billion, bulk of which is for retail expansion.

The oil firm is on track with its annual goal of setting up 50 to 70 stations.

“We’re hoping to hit 1,100 stations by yearend,” Romero said, noting they have about 1,060 branches to-date.

As of the end of September, PSPC reported an eight percent increase in net earnings to P7.2 billion on the back of inventory holding gains and better refinery reliability. Revenues grew 31 percent to P162.8 billion this year.

The Tabangao refinery posted its highest reliability performance in five years, while the North Mindanao import facility maintains Shell’s competitiveness in the south through a highly efficient supply chain.

PSPC said the positive performance was brought about by the robust earnings delivered by its marketing businesses despite high inflation in the country and higher global oil prices.