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Shell sets P4-B capex for 2019

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PILIPINAS Shell Petroleum Corp. (PSPC) is setting aside P4 billion for capital expenditures next year, with its retail business cornering the biggest share of the budget, its top official said.

“For PSPC, our capex remains consistent at P4 billion,” said Cesar G. Romero, the company’s president and chief executive officer, in a media briefing on Wednesday.

“So tatlong taon na kaming nasa P4 billion (So we’ve been consistent at P4 billion for three years now),” he added.

Mr. Romero said the retail segment gets the biggest share of the capital outlay, as the company continues to expand its network of gas stations.

“P2 billion goes to retail to build 50 to 70 stations and then P1 billion for the refinery, [and] P1 billion for supply,” Mr. Romero said.

“One of the things we promised is predictability and consistency. So hopefully, whatever it is we said we are able to demonstrate that we continue to deliver on that,” he said.

Mr. Romero said PSPC is on track to deliver between 50 and 70 new stations this year, while closing 15 to 20 stations that have been bypassed by the road network.

“Project Barako, the bitumen project, is serving customers so nakapag-deliver na kami as of last August,” he said.

“We’re hoping we will hit 1,100 by end of the year. But at the end of the day what we’re really watching out for is our market share. It remains consistent at around 33% in retail. Not bad for a 1,000 site network. Compare that with some of our competitors who have 2,500 [stations] and they only have 35% market share,” Mr. Romero said.

In 2018, PSPC has earmarked a capex of P4.289 billion to cover the year’s outlay for its retail as well as its manufacturing and supply businesses.

In March this year, the company disclosed its target capital expenditure for 2019 and 2020 at P3.903 billion and P4.196 billion, respectively.

Capital expenditures for retail principally relate to the planned establishment of new retail service stations, the company had said.

Of this year’s outlay, up to P2.636 billion had been allocated for retail, and P1.653 billion for manufacturing and supply. — Victor V. Saulon