Year 2009

 April 2009

PTT seeks bigger returns from abroad
Laos hydropower talks should be revived intact

Business

By NAREERAT WIRIYAPONG AND YUTHANA PRAIWAN

PTT Plc has allocated at least 20% of its five-year capital expenditure to overseas investments, which it expects to provide 20% of its revenue by 2012.

Senior executive vice-president Tevin Vongvanich said the company was seeking more opportunities overseas to sustain PTT's annual growth of 20% as seen in the past, mainly driven by oil and gas.

The local energy business, while still showing room to grow, has become saturated as demand has sunk, while PTT has been hit by government energy price intervention.

PTT has a five-year investment budget of 240 billion baht. The company recently spent US$335 million to acquire 60% of an Australian coal miner holding assets in Indonesia, Brunei and Madagascar.

Other targets abroad include liquefied natural gas (LNG), alternative fuels and petrochemicals as PTT aims to be rec ognised as an energy conglomerate.

''There are some overseas assets available for us to acquire or invest in as an investment partner,'' said Mr Tevin. ''We are open for discussions but don't want to be too aggressive amid a time of volatile energy prices.''

PTT has enough cash in hand and funds from bond issuance to pursue its investments, he added.

In its domestic operations, PTT is seeking ways to improve its petrol to meet the Euro 4 emissions standard taking effect in 2011. It may invest in upgrading refining facilities or in sharing facilities and products among the group's refineries, said Prajya Phinyawat, chief operating officer.

The construction cost for upgrading is down 30% from last year with lower materials costs. So far, only Thai Oil and Bangchak Petroleum, out of PTT's five refiners, have upgraded.

''The government may delay the deadline, but we have to comply with Euro 4 anyway. So we should take this time when construction costs are down to finish the project,'' he said, adding that a decision would be made by mid-year.

In the retail business, PTT Retail Management expects non-oil services sales to rise through upgraded station facilities. PTTRM operates 146 former Jet stations, acquired from US-based Conoco Phillips two years ago.

Krisanapol Komolboon, managing director, said the retail unit would spend around 2 billion baht on upgrading and renaming 100 of the Jet stations as PTT outlets this year. Jiffy minimarts at the sites will be renovated but not rebranded.

So far, seven stations have the new identity and average monthly oil product sales volume has risen by 31.5% from 540,000 to 710,000 litres at each. Non-oil sales are up by 42.8% to 3 million baht a month.

PTT shares closed yesterday on the SET at 160 baht, down two baht, in trade worth 1.14 billion baht.

By Bangkok Post

April 8, 2009

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