Shell to focus on petrol stations and convenience stores

Royal Dutch Shell will focus on petrol stations and convenience stores in diverse markets including China, India and Mexico as it seeks to bolster profits in the midst of the growing impact of electric vehicles. By 2025, the firm intends to boost its network of roadside stations by nearly 25% to 55,000, serving 40 million customers every day.

It will add a further 5,000 convenience stores selling products such as coffee and snacks, with growth prioritised on developing economies in emerging markets.

Shell, in addition to other “Big Oil” operators such as BP, believe retail can be a channel to secure demand for the fuels it refines, as consumption could reach a peak within 10 years due to the growth in electric vehicles.

“We plan to be leading through the energy transition,” Shell head of downstream John Abbott said in an investor presentation.

Shell anticipates earnings from its marketing and commercial businesses to increase year-on-year by 7% into 2025, when it should achieve USD 4 billion in earnings.

The company is also to launch various initiatives including electric battery chargers and hydrogen chargers to its petrol stations, hoping to snare some business from the growth in the non-combustion engine segment.

The Anglo-Dutch company said its downstream business, which includes refining, trading, marketing and chemicals, will produce USD 6-7 billion organic free cash flow per year by 2020 based on a Brent crude oil price of around USD 60 a barrel.