Year 2009

 January 2009

PTTEP trims volume forecast
But investment budget remains intact

Business

By NAREERAT WIRIYAPONG

PTT Exploration & Production Plc (PTTEP) has revised down its five-year sales volume growth projection through 2013 in response to the slowing economy, according to chief executive Anon Sirisaengthaksin.

However, the company has vowed to maintain most of its five-year investment plan of 418 billion baht.

The projection now is for 6% average annual growth in gas sales over the next five years, from 30% estimated in 2008. This is mainly due to the expected decline of gas consumption in Thailand in the economic downturn.

The company's main clients are power generators and manufacturers. Energy policymakers recently projected the country's power demand would grow by 2% a year, half the earlier estimate of 4%.

Consequently, PTTEP anticipates that natural gas consumption in 2009 will fall short of the previous target of 350 billion barrels of oil equivalent per day (boed), possibly to about 340 billion.

It estimated average sales volume at 220 billion boed in 2008, up from 180 billion a year earlier, Mr Anon added.

PTTEP reported a third-quarter 2008 net profit of 12.98 billion baht, up 84% from 2007, with nine-month profit up 66% to 34.88 billion baht.

Mr Anon declined to forecast how long the slowdown of gas consumption would persist, saying the company would closely watch developments and adjust production accordingly.

"We have to prepare for country's long-term security of gas supply and be ready to produce more when the demand picks up," he said.

As a result, PTTEP would go ahead with its five-year investment plan, which involves 42 projects under development in Thailand and abroad, he said, adding that 80% of the projected capital expenditure of 418 billion baht would be spent for gas exploration and production in Thailand and Burma.

The PTT Plc affiliate told the Stock Exchange of Thailand earlier that 97.14 billion baht would be invested this year, with petroleum sales projected at 234,878 boed. Most of the expenditure is set for the Bongkot, Arthit, Malaysia-Thailand Joint Development Area, Pailin and Yetagun projects.

'Of the total 42 projects, 15 are under production, four under development and 23 under exploration. The investment excludes the projects of Coogee Resources, an Australian firm acquired by a PTTEP subsidiary recently.

Following the recent write-off of 930 million baht for the Janaka-2 field in the M3 block in Burma, which the company deemed commercially unviable, Mr Anon said, the field still required a three-dimensional seismic test.

However, PTTEP will continue developing the M9 block in Burma as planned.

"Petroleum reserves in the M9 block have clearly proven that they are commercially viable. We will further invest to develop this project, aiming to start production in 2013," he said.

PTTEP shares closed on Friday on the SET at 103 baht, up four baht, in trade worth 844.6 million baht.

By Bangkok Post

January 19, 2009

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