PTT upbeat on oil, petrochemicals

PTT upbeat on oil, petrochemicals

Low margins set to bottom out this year

PTT's margins reached the lowest level in the fourth quarter of 2019, including US$1 per barrel for gross refined oil.
PTT's margins reached the lowest level in the fourth quarter of 2019, including US$1 per barrel for gross refined oil.

PTT Plc, the national oil and gas conglomerate, expects low margins of refined oil and petrochemicals to bottom out this year thanks to better negotiations between the US and China on trade.

President and chief executive Chansin Treenuchagron said there are positive signals from the global trade dispute, which interrupted supply and demand of refined oil and petrochemicals throughout 2019.

"PTT's margins reached the lowest level in the fourth quarter of 2019, such as US$1 per barrel for gross refined oil, while prices of olefins and aromatics have reached the lowest level for many years," he said.

"The global economy should have better sentiment after the trade war affected the Thai economy the past two years."

Mr Chansin said other negative factors from 2019 would end this year such as long shutdowns of oil refinery units for maintenance and additional expenses for employees.

PTT's three refinery companies -- IRPC, Thai Oil and PTT Global Chemical -- are expected to generate 2020 combined margins of 30 billion baht, up from 29.7 billion in 2019.

The three companies have invested heavily to revamp production procedures for the past last several years.

Moreover, other PTT subsidiaries acquired many assets in 2018-19 to generate future income after beginning operations such as the Erawan and Bongkot gas fields in the Gulf of Thailand; Murphy Oil Corporation's business in Malaysia; Partex Holding's business in Oman; and taking over Glow Energy.

Mr Chansin said the economies of the US, China and Europe are expected to grow in 2020.

China is suffering from the Covid-19 outbreak, but the situation will return to normal in the second half of 2020, he said.

Mr Chansin said PTT is focusing on acquiring and investing in new businesses.

PTT's five-year capital expenditure budget for 2020-24 is set at 181 billion baht, a 8.2% rise from the previous plan in order to take advantage of the baht's appreciation.

Some 68% of the total budget is allocated for PTT's joint ventures and subsidiaries, while 17% and 6% are for gas and transmission business, respectively.

Another 7% of the revised budget goes to energy technology and engineering, and the remaining 2% is for downstream and the head office.

A total of 69.3 billion baht was allocated for the 2020 budget.

PTT has set provisional capital spending for 2020-24 at 204 billion baht, up 8.5% from the previous plan, for urgent cases and asset acquisitions.

Mr Chansin said the combined budget allocations from seven direct and indirect subsidiaries of PTT will be at 900 billion baht.

"The total budget is estimated to beef up GDP to grow 0.2-0.3%," said Mr Chansin.

"Thailand's GDP will expand slowly in the first half because of impacts from the virus outbreak."


Do you like the content of this article?
COMMENT

Female army captain charged in knife attack

CHACHOENGSAO: A 45-year-old army captain has been charged in connection with a knife attack on her 83-year-old neighbour in Bang Pakong district on Saturday morning. The victim sustained serious multiple knife wounds.

17:27

Free for now

Criminal Court approves bail for lawyer and student activist arrested on Friday on multiple charges including sedition in connection with an anti-government rally.

17:07

'New normal' race

Organisers of Bangkok Midnight Marathon 2020 apologise and say expats can now take part, after facing a storm of criticism for earlier ban on foreigners.

16:35