Pilipinas Shell Petroleum Corp. will continue to defend and grow its oil business in the face of stiffer competition with the entry of more oil players in the downstream oil industry including the return of Saudi Aramco in partnership with Unioil Petroleum, a top executive said Tuesday.
“I cannot comment directly on their partnership, but what it really means is competition continues to be very challenging in our industry. That will obviously give us more things to think about in terms of how to be more competitive with a company like Aramco coming in the country,” Pilipinas Shell vice president for mobility Michael Ramoleta said in a briefing.
“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, build new sites,” Ramoleta said.
Pilipinas Shell is the country’s second biggest oil company with around 1,100 retail stations nationwide.
Ramoleta said this strong competition may breed consolidation among industry players.
“I think there will come a time that you know people will try to look into consolidating, but I can’t tell the future. This is something we need to watch out, but from Shell’s point of view, we will see how we can be more competitive in terms of not only growing our top line but reducing our costs,” he said.
Pilipinas Shell chief finance officer Rey Abilo said they would continue to sustain the company’s financial gains and transition these into long-term momentum.
“Now, in a hyper-competitive and very capital-intensive and volatile industry that we are in, we will continue growing our top line and strengthen our market positions. We will also leverage our balance sheet and…generate healthy, positive, free cash flow moving forward,” he said.
He said the oil firm would continue its disciplined approach in terms of capital spending in the next two years.
The company isa looking at capital expenditures of P2 billion to P3 billion annually in the next two years to be equally spent on mobility business and supply chain.