Pilipinas Shell Petroleum Corp. plans to invest between P15 billion and P20 billion over the next five years as part of expansion program, a top executive said Wednesday.
“We are hoping that we would be able to continue with our investment profile of anywhere between P3 billion and P4 billion per year for the next five years,” Pilipinas Shell president and chief executive Cesar Romero said.
Pilipinas Shell will have three major changes in its strategic priorities in the next five years, he said.
The company is refocusing its business to ensure it is well-positioned to meet the country’s energy and mobility requirements as the economy recovers from the pandemic.
This approach, which will advance the development of low-carbon operations, is expected to drive shareholder value and help determine the energy future of the Philippines.
“The Royal Dutch Shell Group continues to believe in the promise of the Philippine economy and our country. We believe that Pilipinas Shell is in a strong position to capture these opportunities because of our strong footprint and 107-year history in the Philippines,” Romero said.
The company is transforming its supply chain from manufacturing to full importation following the closure of its 110,000-barrel-per-day refinery in Tabangao, Batangas.
It is also changing its business model from retail to mobility and shifting to lower carbon operations and introducing lower carbon products and services.
“Where it differs now is it will allow us to invest more in our very profitable retail now called mobility business and improve the efficiency of our supply chain,” Romero said.
The transformation of the Tabangao refinery facility into a full import facility enabled Pilipinas Shell to focus on improving efficiency and operational standards.
The refinery’s conversion also reduced capital and operational expense exposure, lessened vulnerabilities to variability and product pricing and brought about growth.
“So before when we had the refinery, we were spending as much as P1 billion per year just on asset integrity and basic maintenance, whereas now we will be spared of that value and we could redeploy the capex to really value adding investments either in terms of revenue generation or cost reduction,” he said.
Romero said the company would also invest in two medium range import terminals in the five-year period.
Pilipinas Shells has three oil terminals including the Tabangao refinery turned import terminal, the newly-opened Subic terminal and the North Mindanao Import Facility in Cagayan de Oro City.
“Now as far as the two MR terminals are concerned, we believe the growth of the country will continue to be in the south so it will be in either in Visayas or Mindanao. Those are the areas we have been looking out but of course it does not mean we will preclude any investment in the north should growth will be in the north,” Romero said.