By
Lenie Lectura - June 1, 2017
“We are favorably
endorsing to the Securities and Exchange Commission the attached Amended
Articles of Incorporation of Shell with the statement that this agency
interposes no objection to amending the Second Article of the Articles of
Incorporation,” the DOE said.
In particular, Shell
intends “to purchase, create, generate, hold or otherwise acquire electric
current and electric power of every kind, description and source, and to sell,
market, supply or otherwise dispose of at wholesale/retail.”
Shell operates a
refinery in Tabangao, Batangas, that produces its own electric power through
turbines fueled mainly by natural gas. The excess electricity will be sold in
the spot market. The DOE said Shell must comply with the DOE and Energy
Regulatory Commission policies, including the Retail Competition and Open
Access and WESM rules, among others. Early this month, the oil firm sought
approval from shareholders to expand its business to include the sale of
electricity.
“The selling of excess
power is not the main driver of our business. We see an opportunity because of
the equipment we have, but our core business continues to be our highly
profitable marketing business,” company President Cesar Romero said. “If
there’s an opportunity to make extra margin on our refinery then we will do
so.” The oil firm plans to build 50 to 70 stations a year. It has over 900
stations to date. In 2016 it built 48 new stations.
Romero said 20 percent
to 25 percent of the P4-billion capital expenditure allocated every year over
the next three years will be used to expand its retail business to 1,200
service stations by 2020. Shell, according to a company official,
is eyeing to expand along the Subic-Clark Toll Expressway.
“The retail business
continues to be strong. The only area we are concerned with is the fuel for
power. With the coming in of coal plants, the demand for fuel oil for power has
decreased,” Romero said.
The company remains
bullish for the year as it sees core earnings to grow by P1 billion to P2
billion year-on-year in succeeding years.
“Our commitment is
improvement in underlying performance of about P1 billion to 2 billion a
year, taking out inventory gains and other extra ordinary ones. More or less,
that is the trajectory we’re trying to pursue,” Romero said. The oil firm
posted a 27-percent increase in earnings for the first three months of the year
to P2.89 billion, from P2.27 billion in the same period last year.
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