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PTT Steps Up Investment Abroad: Reserves Needed to Sustain Growth

Posted on: Monday, 6 February 2006, 12:00 CST

By Busrin Treerapongpichit, Bangkok Post, Thailand

Feb. 4--PTT Exploration and Production Plc will focus on overseas investment to secure gas and oil reserves to ensure sustainable growth in revenue in the future, president Maroot Mrigadat said yesterday.

Apart from investments totalling 231 billion baht planned over five years, the company is considering plans to increase investment overseas, especially in countries rich in energy resources.

"Although our proven reserves have been increasing by 6 percent per year, we see them as insufficient if we need to secure our revenue growth," he said.

PTTEP has 151 million barrels of crude oil and condensate and 5.158 million cubic feet of natural gas in reserves, or altogether 950 million barrels of oil equivalent, an increase from 899 million last year.

Currently, PTTEP's ventures overseas represent only 14 percent of its total investment, which is seen as rather modest.

Not included in the current plan are efforts by PTTEP to tap resources in Sudan, where it is negotiating with two Chinese investors, China Natural Gas Co (CNPC) and CNOOC, to co-invest in several sites.

The company is also in talks with PTT, Unocal, Total and National Oil of Iran, to produce 500,000 tonnes annually of liquefied natural gas (LNG) at South Pars block in Iran.

The project has strong potential as Iran is one of the most energy-rich nations in the world, but foreign investors might need to be cautious because of political risks, not least the current controversy over Teheran's nuclear policy.

The negotiations are expected to be wrapped up this year.

PTTEP has earmarked 63.3 billion baht for investment this year for 29 ongoing projects domestically and overseas.

Outside of Thailand, PTTEP will explore for more petroleum in the current fields in Oman, Algeria, Burma and Vietnam, where it has committed to invest more if it successfully discovers major reserves.

At home, PTTEP will focus on exploration in the Gulf of Thailand, particularly the Arthit, Malaysia-Thailand Joint Development Area (JDA) and Nang Nuan projects, and improve the production efficiency of its onshore S1 field.

Apart from Southeast Asian countries, PTTEP also will focus on Africa including Sudan, Libya and Egypt.

The company this year expected to see its sales volume increase by 16 percent to nearly 180 billion barrels of oil equivalent (boe) per day from 134 billion boe last year in accordance with its rising output.

PTTEP last year earned record sales revenue of 68.35 billion baht, up 57.54 percent from 47.7 billion baht in 2004, with a net profit of 23.7 billion baht, up from 15.8 billion baht.

The company recently announced it would split its par value to one baht from five baht a share currently, scheduled for completion by the end of April.

As a result of the changing par value, the number of registered common shares will be increased from 664.4 million to 3,322 million. The par value adjustment will increase liquidity of PTTEP shares and allow more participation by retail investors.

PTTEP shares closed yesterday on the SET at 544 baht, up four baht, in trade worth 580 million baht.

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Copyright (c) 2006, Bangkok Post, Thailand

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PTT,

Source: Bangkok Post

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