Shell sets P6 billion capex amid fierce competition

MANILA, Philippines — Oil player Shell Pilipinas Corp. (SPC) is setting aside up to P6 billion for capital spending over the next two years to stay competitive in an increasingly tight domestic market.

In a media briefing yesterday, SPC vice president for finance Reynaldo Abilo said around P2 billion to P3 billion per year would be earmarked for capital expenditures in 2025 and 2026.

The capex, funded by internally generated cash flows and operations, would be evenly split between SPC’s mobility business and supply chain, Abilo said.

The company intends to build new fuel stations and upgrade existing ones as part of its efforts to deliver quality service and experience to customers.

It also plans to infuse fresh capital into the Shell Import Facility Tabangao in Batangas, its biggest import terminal in the Philippines.

The funding, Abilo said, would ensure safe and reliable jetting operations while also improving cost competitiveness and creating new revenue streams.

These investments are expected to give SPC a competitive edge as it continues to navigate a more intensely competitive market environment.

This comes on the heels of Saudi oil giant Aramco’s planned buyout of a 25-percent stake in the Co family-led Unioil Petroleum Philippines.

With Aramco returning to the Philippines after divesting in Petron in 2008, SPC vice president for mobility Michael Ramolete expects industry competition to be “very challenging.”

“But we will stay the course in terms of trying to defend and grow our business, manage our prices properly where we can afford them, and be more competitive and build new sites,” he said.

For 2025, Ramolete said SPC is looking to put up around 15 to 20 new fuel stations across the country after shutting down 15 sites last year due to financial challenges.

“We will continue to review our portfolio each year to ensure that all sites are delivering the target earnings,” he added.

To date, the oil firm has a network of about 1,100 fuel stations nationwide.

In the first quarter, SPC saw its net income plunge by 47 percent to P740 million from P1.4 billion previously due to price volatility amid increased competition and the early impact of US tariff policies.

Core earnings, on the other hand, went up by 26 percent year-on-year to P870 million, thanks to improved marketing sales and higher premium penetration.

Looking ahead, SPC president and CEO Lorelie Osial remains optimistic about the company’s growth prospects this year.

“There will be headwinds, and the market will continue to be challenging. Therefore, we will have to continue and improve our agility and adaptability to deliver our commitments to shareholders,” Osial said.