Bangkok--25 Dec--PTTEP
- Aproximately USD 24 billion for 5-year plan (2015 – 2019), of which 80% allocated to the investments in Thailand and Southeast Asia
- Prioritize the investment projects to ensure the investment flexibility
- Target sales volume of 343,000 barrels of oil equivalent per day (BOED) in 2015 or a rise of 6%
- Strong financial status and liquidity to capture opportunities in M&A deals amid the low oil price environment
Tevin Vongvanich, President and CEO of PTT Exploration and Production Public Company Limited or PTTEP summarized the 2014 operating results as well as revealed the adjusted 2015 investment plan that fit with the global oil price circumstance as details below:
2014 Key Achievements
In 2014, PTTEP expects sales volume of approximately 320,000 barrels of oil equivalent per day (BOED) or 9 % higher than the year 2013. The increase of sales volume was resulted from the startup of Zawtika project and the acquisition of Hess Thailand. Despite the decrease in oil price in the fourth quarter, PTTEP has experienced minimal impact on its recurring operations because crude oil sales volume accounts for 33% of total sales volumes and the company has also hedged against falling crude oil prices. Meanwhile, the short-term outlook of lower oil prices has relatively subdued impact on gas prices as between 30-50% of the company’s natural gas sales price is indexed to oil prices with a 3-month, 6-month or 1 year lag-time depending on the project. The majority of the company’s production is natural gas, accounting for 67% of total sales volumes.
However, the significant decrease in oil prices may result in decreased fair values of certain assets at the end of the accounting period, and subsequently impact the Statement of Profit and Loss. Therefore, the company will continue to closely monitor the movement of oil prices and act in accordance with the accounting standards.
Investment of Approximately USD 24 billion for 5-year Plan (2015 – 2019)
The capital expenditure (CAPEX) and operating expenditure (OPEX) of the company and its subsidiaries from 2015 to 2019 will be approximately USD 24,295 million. Almost 80% of the amount is allocated to develop PTTEP’s exploration and production projects in Thailand and abroad. The planned expenditure is shown in the chart;
Unit: USD Million
tr>/tr>td bgcolor="#ffffff" width="29%">/td>td bgcolor="#ffffff" width="11%">/td>2015td bgcolor="#ffffff" width="11%">2016/td>td bgcolor="#ffffff" width="11%">2017/td>td bgcolor="#ffffff" width="11%">2018/td>td bgcolor="#ffffff" width="12%">2019/td>td bgcolor="#ffffff" width="15%">2015-2019/td>tr>td bgcolor="#ffffff" height="22" width="29%">Capital Expenditure/td>td bgcolor="#ffffff" height="22" width="11%">3,071/td>td bgcolor="#ffffff" height="22" width="11%">3,437/td>td bgcolor="#ffffff" height="22" width="11%">3,833/td>td bgcolor="#ffffff" height="22" width="11%">3,110/td>td bgcolor="#ffffff" height="22" width="12%">2,411/td>td bgcolor="#ffffff" height="22" width="15%">15,862/td>/tr>tr>td bgcolor="#ffffff" height="20" width="29%">Operating Expenditure/td>td bgcolor="#ffffff" height="20" width="11%">1,761/td>td bgcolor="#ffffff" height="20" width="11%">1,767/td>td bgcolor="#ffffff" height="20" width="11%">1,660/td>td bgcolor="#ffffff" height="20" width="11%">1,648/td>td bgcolor="#ffffff" height="20" width="12%">1,597/td>td bgcolor="#ffffff" height="20" width="15%">8,433/td>/tr>tr>td bgcolor="#ffffff" width="29%">Total Expenditure/td>td bgcolor="#ffffff" width="11%">4,832/td>td bgcolor="#ffffff" width="11%">5,204/td>td bgcolor="#ffffff" width="11%">5,493/td>td bgcolor="#ffffff" width="11%">4,758/td>td bgcolor="#ffffff" width="12%">4,008/td>td bgcolor="#ffffff" width="15%">24,295/td>/tr>
The investment amount is yet to include the expenditure prepared for new business opportunities, aimed at increasing company’s petroleum reserves. In addition, the company has prioritized the investment projects as follow,
Projects under the producing phase: to maintain the production levels to ensure the smooth supplies of petroleum for the domestic consumption
Projects under the development phase: to adjust the investment strategies to align with current global oil prices
Projects under the exploration phase: to defer high risk and uncommitted projects until the appropriate time
2015 Business Plan
In 2015, the overall investment expenditure is amounted to USD 4,832 million, of which 52% is allocated to maintaining production levels for projects in Thailand, namely, the Arthit Project, S1 Project, Bongkot Project, Contract 4 Project, and MTJDA-B17 Project. Meanwhile, 20% another will aim at projects in Southeast Asia, mainly in the Republic of the Union of Myanmar, to maintain production levels for Zawtika Project, development of Myanmar M3 Project, and potential study for Myanmar PSC G & EP 2 Project, Myanmar MOGE 3 Project, Myanmar MD-7 and MD-8 Project.
From 2015’s CAPEX and OPEX plans, sales volume is expected to increase to 343,000 BOED, or 6% increase from last year. The supporting factors are full-year contributions of Zawtika project and assets acquired from Hess Thailand as well as the expectation of first crude oil from Algeria 433a & 416b project in the second quarter. “The fluctuating global oil prices have inevitably impacted our operations, forcing us to adjust the 5-year investment plan. We also initiate the “SAVE … to be SAFE” project to reduce operating costs.
Despite the tough time, the company still has strong liquidity to support the opportunistic M&A. We will closely monitor the movement of crude oil prices. If the prices fall below our projection, we have a room to adjust the investment budget downward in order to maintain our good liquidity and strong performance,”said Mr. Vongvanich said.