SET-listed PTT Plc, the national oil and gas conglomerate, is reviewing its overseas coal business and adjusting its domestic gas and refinery businesses to suit the climate of falling oil prices, says new chief executive Tevin Vongvanich.
He said PTT was looking again at whether to sell its palm oil plantation in Indonesia but was pressing ahead with plans to divest oil refinery businesses by selling its stake in Star Petroleum Refining Co (SPRC) after disposing of its share in Bangchak Petroleum Plc (BCP).
PTT also plans to put its gas business under a single company to make it easier to manage as well as to change its system of calculating its balance sheet from the bottom line to consolidation.
"We have to implement a production cost-cutting scheme in coal business and then we will decide whether to go on or suspend the business," Mr Tevin said on his first official day as chief executive yesterday.
PTT diversified into coal energy in 2009 through its PTT Mining Co, a wholly owned subsidiary of PTT International Co, by purchasing a 60% shareholding in Straits Bulk & Industrial (SBI).
SBI owns 47% of Straits Asia Resources (SAR) and is listed on the Singapore Exchange.
It has a lot of coal mines in Indonesia, Brunei and Madagascar. Some are operating but others need time to develop.
In April 2012, PTT purchased 45% of SAR, which operates coal mines in Indonesia's Jembayan, Sebuku and Luang worth US$900 million.
However, its annual coal production last year stood at 11 million tonnes, well below previous forecasts of 15 million by 2015 and 20 million by 2020.
A source said profit margins on coal were narrowing because production costs averaging $50 per tonne were very close to global prices.
PTT has sold three of its five palm plantations for $6.8 million.
That was well below the price of $14.725 million it paid to buy a 95% stake in Indonesian palm oil company PTT Mitra Aneka Rezeki when it diversified into palm oil in 2008.
Another two major assets will be sold by the end of this year, Mr Tevin said.
PTT sold all its 27.2% shareholding in BCP for about 10 billion baht to the Finance Ministry last year.
The company also plans to sell its 36% stake in SPRC by year-end.
It plans to sell its share of SPRC via an initial public offering and will list it on the SET. Chevron holds a 64% stake in SPRC.
PTT shares closed yesterday on the SET at 241 baht, up one baht, in heavy trade worth 1.04 billion baht.