PTT boosting investment by 2020 to support Thailand’s energy needs

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BANGKOK, July 20 – PTT Plc, Thailand’s largest oil and gas conglomerate, is looking to expand its investment by 2020, according to its plan, to ensure the country’s stable energy supply.

 

PTT chief executive Prasert Bunsumpun said the investment expansion by then will have had investments of some Bt3 trillion (US$100 billion) — half for exploration and production of petroleum, petrochemical, and coal, and half for investments abroad in subsidiary firms to transition to become a business conglomerate instead of an oil and gas-focused company.

If successful, PTT will achieve a doubled revenue as its investment fund, about Bt6 trillion ($200 billion).

If 4-5 per cent profit is reached, the company will gain about Bt340 billion in profit, creating more revenue for the Thai government.

Since 2001 when PTT entered Thailand’s stock market, it has averaged profits of Bt25 billion/quarter.

“PTT has provided the Finance Ministry almost Bt400 billion from 2001 until last year, the highest revenue achieved for the government and comparing [favourably] with the world’s other leading oil firms” said Mr Prasert.

He said that about Bt1 trillion will be invested initially, with Bt330 billion from PTT Plc, over Bt400 billion from PTT Exploration and Production (PTTEP), and over Bt200 billion from PTT’s Petrochemical and Refining Unit.

The investments will go mainly to its gas business such as the construction of liquefied natural gas (LNG) distributing storage tanks in the second phase, setting up gas transmission and distribution piping systems to Thailand’s north and northeast, and laying a fourth land pipeline to connect LNG storage to gas users.

The NGV (Natural Gas for Vehicles) network will also be expanded, as well as putting up minor tubes to connect with the main pipelines’ network.

As a result, PTTEP expects its production volume to rise to 900,000 barrels/day in 2020 from the current volume at some 200,000-300,000 barrels/day.

Mr Prasert said the coal business will be new for PTT, but will tend to generate good revenue, for coal is considered cheap fuel and has a defined level of measured reserves worldwide for more than 120 years, compared to a 40 year availability timeline for oil and 60 years for natural gas.

To be invested through PTT Asia Pacific Mining, the business is expected to reach 30-40 million tonnes production in 2015 and increase to 70 tonnes annually in 2020. The firm has mines in Indonesia and currently produces over 10 million tonnes of coal per year.

PTT Plc’s business turnover and profits this year is forecast at its record highest at Bt2.3-2.4 trillion if oil prices stand at US$90-100/barrel, Mr Prasert said, while the company’s profits in the first quarter hit a record high at Bt34.5 billion.

PTT management will meet next week to discuss the firm’s five-year plan to become one of the world’s biggest 100 companies, from 128th this year, as ranked by Forbes Magazine.