ENERGY

National oil conglomerate PTT Plc is set to trim or scrap investments in subsidiaries that are not profitable or underperform in a move to control costs and enhance competitiveness.

Chief executive Pailin Chuchottaworn said yesterday the plan is part of PTT's strategy to focus on profitable and performing operations while seeking more mergers and acquisitions in Europe in the oil, gas and petrochemical sectors.

As a national oil supplier, the company expects liquefied natural gas will still play a vital role in the Thai energy market over the next decade because Thais are pessimistic about coal and nuclear power.

PTT expects gas demand will grow at an average of 4.1% from 2012 to 2016, gaining from 4,380 standard million cubic feet per day (MMSCFD) in 2011 to 7,000 MMSCFD in 2016.

The European crisis will allow the chance to buy more energy assets.

He predicted all Southeast Asian nations would terminate their energy subsidies in 2015 once the Asean Economic Community takes place.

Surong Bulakul, PTT's chief finance officer, said PTT has more than 20 companies out of 250 total in the group that are inactive or underperforming, citing Keloil-PTT LPG Sdn. Bhd. in Kuala Lumpur and Petro Asia Co in Thailand, as well as Huizhou, Maoming and Sanshui in China. All these subsidiaries range from 20% to 40% ownership by PTT.

PTT announced earlier its capital expenditures from 2012 to 2016 would amount to 900 billion baht, 41% of which will go upstream, 16% to petrochemicals and refineries, 16% to the gas business, 6% for oil and trading, 19% for other opportunity and 2% for research and development.

PTT aims to increase oil and gas production to 900,000 barrels of oil equivalent a day from 273,000 last year.

PTT subsidiary PTT Global Chemical Plc (PTTGC) acquired a 51% stake of Perstorp Holding France SAS for 115 million (4.5 billion baht) last November.

PTT shares closed yesterday on the SET at 342 baht, up three baht, in trade worth 589.08 million baht.