Local Shell earmarks 14-B capex in 2019
Listed firm Pilipinas Shell Petroleum Corporation will be allotting 14.0 billion next year for capital expenditures (capex) that will primarily bankroll its retail network expansion.
“Our capex remains consistent at 14.0 billion. It has already been our third year at 14.0 billion capex level,” Pilipinas Shell President and CEO Cesar G. Romero said. On the allocation, he noted that 12.0 billion will be earmarked for retail portfolio reinforcement; 11.0 billion for the company’s Tabangao refinery operations in Batangas; while the other 11.0 billion will be spent for its supply chain.
“One of the things that we promised is predictability. Hopefully, whatever it is that we say we are able to demonstrate that we continue to deliver,” Romero said.
For 2018, he emphasized that the company is on track to deliver the 50 to 70 stations that it cast on blueprint at the start of the year.
Romero nevertheless explained that while they have been constructing 50 to 70 stations yearly, they have also been retiring 15 to 20 stations over the same timeframe.
“The retail network is a live thing…it has a life cycle, and there are also cases where the road leading to a gas station has already been bypassed,” he explained, and such he said warrants decommissioning of these stations.
Shell already has 1,060 stations and the target for the year that it would want to end up with shall be at 1,100 stations.
Even at such scale of stations, however, Shell said it has been performing relatively well in terms of market share – with 33 percent fraction in the pie in the retail segment.
“At the end of the day, what we’re really watching out for is our market share – 33 percent for retail – not bad for 1,000 site-network compared that to some of our competitors who have 2,500 stations,” Romero stressed.
He added that the company’s bitumen facility is anticipated contributing positively to the company’s top and bottom lines. First delivery from its newly commissioned bitumen plant was in August this year.