Crisis control
Cesar G. Romero
This year started like any other, with Pilipinas Shell Petroleum Corp. (PSPC), the oldest energy company in the Philippines, raring to execute its business plans and achieve new milestones.
The meticulously crafted plans were immediately thrown into disarray, however, first because of the Taal eruption in January, then followed in March by the unprecedented economic and social crisis caused by the COVID-19 pandemic that still has the country firmly in its grip.
Pilipinas Shell indeed had no choice but to quickly recalibrate its systems and operations to meet the unexpected challenges to its people, operations and bottom line.
Test of leadership
Leading the charge is PSPC chief executive officer Cesar G. Romero, who has responded admirably to the crisis that has tested not just his leadership mettle but also the resilience of the entire organization.
Given what it has been going through since the start of quarantine measures in March, it believes it has what it takes to overcome the latest crisis.
“This pandemic is an unprecedented global event, and we have not seen something of a similar scale in decades. More than a test of leadership, it was a test of Filipino values such as malasakit and bayanihan. For us at Shell, it has been one of the best documented and best measured disaster relief responses in recent years. Now, we have improved working frameworks for providing meaningful and agile help to the communities we serve,” Romero told the Inquirer.
The first order of business when the gravity of the COVID-19 situation became apparent, Romero said, was to focus on three Cs—care for people, continuity of business and cash preservation.
Care meant securing the health, safety and well-being of its employees, then extending that care to its communities, customers and wider society. Shell provided immediate relief to communities in areas where it operates, to help them recover from the economic impact of the pandemic.
Shell has reached almost 700,000 Filipinos through various COVID-19 response activities. It provided 3.8 million liters of discounted fuels that transported health-care workers, front-liners and critical goods. Meanwhile, Pilipinas Shell Foundation’s “Para sa Bayani” program has provided more than 522,000 meals to, among others, front-line workers and affected communities.
Financial strength
As for cash, Romero said Shell took immediate action to reinforce its financial strength, which meant conserving financial resources, maximizing generation of revenues, enhancing efficiency of cost, capital expenditures, working capital and improving deployment of assets.
This meant making painful decisions, however, including the deferment of the cash dividend to shareholders and cancellation of discretionary performance bonuses to all staff for 2020 performance.
“Those were really difficult decisions to take as they involve people,” Romero said.
Then there’s continuity, which refers to making sure that its operations keep on running, by employing new ways of working to respond to the so-called new normal situation where some physical distancing will still be required, movements remain restricted and transportation options will remain limited.
“While we cannot predict what will happen, we are embracing the current reality and embedding our plans to thrive in this crisis. Our priorities are anchored through our recovery strategies in place across all our businesses. We will continue to make the hard decisions to protect cash flow and liquidity through cash preservation and cash generation measures and enhance financial resilience by further strengthening our balance sheet. It is our continuing aspiration to become a world-class investment case and we are poised to seize opportunities as the world enters the new normal,” he said.
Inspiration
Romero admitted that the past months have been a trying period for the whole organization but he finds inspiration and strength from Shell’s people.
“One could easily be distracted and talk at length about low points during these times. We have never seen anything like this before and our situation has been exacerbated by the simultaneous collapse of oil prices, and demand destruction due to the COVID-19 crisis. However, amid these challenges, I cannot help but be inspired by the resilience, resourcefulness and go nature of our staff,” he said.
“This huge organization was only able to function because our people had the initiative, and the capability to immediately do what they needed to do in their respective areas. Otherwise, things would not work if the organization needed to rely on the drumbeat of one person alone. COVID-19 changed us a lot, in many ways, but the bayanihan spirit is very much alive in every Shell staff and I am proud of it,” Romero added.
This gives him an added reason to be optimistic about prospects next year, especially with the possibility that there will finally be a vaccine to counter the COVID-19 pandemic. But even without it, he is banking on the country’s macroeconomic fundamentals that have remained healthy despite the impact of the pandemic to propel Shell’s growth.
“When the Philippine economy takes off, so will our business. We are working every day to ensure that we are positioned best to capture the opportunities once the country recovers,” he said, “We will overcome this challenge the same way we surmounted the various crises and upheavals during our 106-year legacy in the Philippines. Shell is prepared for whatever scenario that may come its way.” INQ
