Shell Pilipinas Corp. announced that it would be investing around ₱2 billion to ₱3 billion per year within the next two years to sustain investments at its import facility in Tabangao, Batangas City, as well as develop and upgrade its mobility unit.

During the oil firm’s annual stockholders meeting on Tuesday, May 13, Rey Abilo, Shell’s vice president for finance and executive director, explained that their capital expenditure (CAPEX) strategy would improve their mobility business and their Batangas facility.

“We would continue our disciplined approach in terms of capital spending in the next two years, [from] 2025 to 2026. We will be investing a total CAPEX between ₱2 billion [and] ₱3 billion per year in the next two years, and that will be equally split between our mobility business and our supply chain,” he said.

“[The CAPEX will be used] to build, upgrade, and refresh our mobility stations to continuously provide superior customer service and experience to our customers… At the same time, we will be investing in Tabangao, which is our biggest import terminal,” Abilo added, citing the need to improve the area to boost the company’s cost competitiveness and gain new revenue streams.

Initially a refinery before being repurposed as a terminal in 2021,  the Tabangao import facility has a 263-million-liter (ML) storage capacity, which would allow safer and efficient product transfer.

Last August 2020, the refinery shut down after taking a hit from the impact of the COVID-19 pandemic on the oil business. The terminal has since then been redesigned to address the demand for fuel in Metro Manila and beyond.

Outside of import facility investments, Mike Ramolete, vice president of Shell’s mobility business, believes that this year would be more challenging for the oil company, especially as one of its competitors had struck a deal with Saudi Arabian oil gianr Aramco.

“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,” he said. “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.”

According to Ramolete, he believes that there would come a time when oil players would soon consider consolidating with other companies.

“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.”

Station outlook

As the company continues its growth strategy, Ramolete further shared that they are planning to build more gas stations nationwide, building up to its current number of 1,100 across the country.

“We’re looking into putting up around 15 to 20 new sites… Part of our costs and capital reduction were to hydrate our mobility network to prevent further losses and generate cost savings. The sites [that were closed down] failed to meet the criteria for expected returns.”

In the electric vehicle (EV) charging fleet, Shell continues its momentum as the largest provider of EV charging, integrated in most of its stations, especially in busier, longer roads such as the North and South Luzon expressways (NLEX qnd SLEX).

Lorelie Quiambao Osial, president and chief executive officer of Shell, during her presentation said that the company is moving forward with growth strategies for the oil firm, after it yielded an improvement in its 2024 net income to ₱1.3 billion.