PTTEP predicts slight hike in sales volume

PTTEP predicts slight hike in sales volume

Company expects oil production to stay flat

PTTEP's Bongkot offshore gas block in the Gulf of Thailand, where it recently increased its stake.
PTTEP's Bongkot offshore gas block in the Gulf of Thailand, where it recently increased its stake.

SET-listed PTT Exploration and Production Plc (PTTEP), an oil and gas drilling firm, anticipates average sales volume of 302,000 barrels of oil equivalent per day (Boed), up by 1%. But the firm forecasts overall production from many oil and gas fields to stay flat.

Chief executive Somporn Vongvuthipornchai said although it acquired an additional stake of 22.22% from Royal Dutch Shell in the Bongkot gas blocks of the Gulf of Thailand, that will not change the company's oil and gas production plans much this year.

Earlier this month, PTTEP announced the acquisition deal, worth US$750 million (23.5 billion baht) before tax, increasing PTTEP's ownership in the Bongkot project from 44.44% to 66.66%.

The deal is expected to be completed in the second quarter.

Mr Somporn said the Bongkot project has daily gas production of 35,000 Boed, which generates volume for PTTEP of 17,000 Boed.

But PTTEP aims to maintain its daily sales volume for the onshore Sirikit oilfield in Phichit province.

New auctions for Bongkot and Erawan, another gasfield in the same area which is operated by Chevron, are expected this half.

The Two gas fields have combined output of 2.2 billion standard cubic feet per day, almost 50% of total gas demand in Thailand.

But the auction's terms of reference will be held off until April, although the auction itself is not expected to be delayed.

Mr Somporn said PTTEP is now ready to take part in bidding for the two gas fields by teaming up with Chevron, under the condition that PTTEP increases its share in Erawan.

But if the two sides fail to come to an agreement, PTTEP is willing to take part in the auction alone or find another partner, he said.

Mr Somporn said PTTEP is in multiple discussions on acquiring stakes in oil and gas resources in Southeast Asia and the Middle East. PTTEP aims to resume business in the Middle East because it sees lower production costs for oil and gas there. He expects at least one deal to be disclosed in the first half.

"Any deal will not entail a financial burden for PTTEP because the company has cash on hand of $4.5 billion, on top of its access to lending", he said.

PTTEP reported its average sales volume in 2017 dropped by 6.6% to 299,000 Boed.

Mr Somporn forecasts the global oil price will stay in a range of $55-65 per barrel, higher than last year at $53.5 per barrel.

PTTEP shares closed yesterday on Stock Exchange of Thailand at 118 baht, an increase of 2.50 baht, in heavy trade worth 2.3 billion baht.

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