Majority state-owned Bangchak Petroleum Plc (BCP) plans to become the second national oil company after its major shareholder PTT Plc.
Bangchak’s existing refinery on Sukhumvit Road has capacity of 120,000 barrels per day but is near the inner city, with high land prices and no vacant land available for expansion. A feasibility study will look into building a second, 100-billionbaht facility outside of Bangkok to raise capacity to 300,000 barrels per day.
President Anusorn Sangnimnuan, who will step down at the end of this month after eight years at the helm, yesterday said he has accomplished his top priority during his two terms.
That was turning the company around from a long-term loss and putting it back in the black by upgrading refinery facilities to improve the product quality.
With the company poised for a rapid rise in the year to come, Mr Anusorn believes it has great potential to become the second national company.
It is majority owned by state enterprises including petroleum leader PTT and has a refinery of high quality, while it is rapidly expanding service stations and other energy-related businesses.
His successor, Vichien Usanachote, will inherit a roadmap that lays out all the new investment projects.
The company has positioned its business along two lines.
Anusorn: Realised goal of profitability
First is oil refining, retail oil and services and other petroleum products accounting for 75% of revenue, while the second, representing 25% of the total, is renewable energy including solar energy, ethanol production and biodiesel. In the next 3-5 years, petroleum revenue will account for half the total and other businesses, both existing and new, the rest.
The company has set a target for earnings before interest, tax, depreciation and amortisation (Ebitda) of 13 billion baht in 2016 including 2.8 billion from its 170 megawatts of solar energy production.
This year's Ebitda is estimated at 7.3 billion baht from sales of 170 billion.
Mr Anusorn said lessons were learned from the fluctuating crude prices that caused the company to suffer an overall inventory loss despite sporadic inventory gains.
"We're clearly the leader in green products, so renewable energy is the right direction," said Mr Anusorn, adding that the company is also considering the food business.
"I can't say anything right now except that this will be a big project," he said.
Previously, the company announced an investment budget of 24.3 billion baht for 2013-16.
Of that, 9.5 billion baht will be allocated for solar power operations, 6 billion for upgrading the existing refinery on Sukhumvit Road, 4 billion for expanding the retail oil network, 800 million for biofuel and 4 billion for general investment.
Bangchak plans to have solar farms generating 95 MW by February, up from 45 MW now, eventually increasing to 170 MW.
It is also considering wind power, with a goal of producing capacity of 60-80 MW either on its own or through a joint venture.
"But I cannot share any details of these projects right now, as we're still waiting for board approval. Next year all will be revealed, especially since it will be the new boss's decision," said Mr Anusorn.
He also spoke about the new oil standard _ all of Bangchak's petrol and diesel now meet Euro 4 emission standards, but the company is looking ahead to the next stage, Euro 5.
Regarding the retail oil business, Mr Anusorn stressed the plan is to beat the present No.2, Esso.
Bangchak is now ranked third in the retail oil market with a 13-14% share, slightly behind Esso at almost 15%.
"We've earmarked 3 billion baht to beef up our retail oil business," said Mr Anusorn.
Bangchak will also open service stations in Myanmar, Laos and Cambodia after only exporting petrol and petroleum products to them in the past.
A second, 100-billion-baht refinery is being considered for outside of Bangkok to raise capacity to 300,000 barrels per day, but Mr Anusorn said that will depend on the results of a feasibility study.
The existing refinery on Sukhumvit Road has capacity of 120,000 bpd but is near the inner city, with high land prices and no vacant land available.
Shares of BCP closed yesterday on the SET at 29 baht, unchanged, in trade worth 115 million baht.
About the author
- Writer: Busrin Treerapongpichit
Position: Business Editor