PILIPINAS Shell Petroleum Corp. is confident that the upgrade of its Batangas refinery and the continuing decline in petroleum product prices would help boost its revenue growth this year.
Pilipinas Shell country president Ed Chua however said the refinery is still being observed if production would be continuous.
Shell had earlier targeted to finish the expansion of the 110,000-barrels per day (bpd) refinery in Tabangao, Batangas before the year ends. The upgrade was done to meet Euro 4 standards that will take effect in January next year.
The Euro 4 standards require fuel products to have significantly lower amounts of sulfur and benzene. Euro 4 is a globally accepted European emission standard for vehicles.
Chua did not indicate how much additional revenue the Batangas refinery would bring to the company.
Meanwhile, he said the decline in the prices of petroleum products is positive for the company.
“It is good for us because we have higher demand, volumes are up and therefore revenues are up,” Chua told reporters over the weekend.
But he added that if the global oil price slump continues, the impact would be reflected as inventory losses.
“If that is the case, we will again experience inventory losses,” he said.
He cited Shell’s experience last year when they incurred losses due to a steep dive in world oil prices from July to December last year.
“Last year that happened to us. We had $110 at the start of 2014 then by the end of 2014 it went down to about $60, so our loss was about $50 per barrel,” he said.
Earlier reports said the company posted a net loss of about P1.2 billion in 2013 and possibly an even bigger loss in 2014 due to a more expensive fuel stock.