SET-listed Bangchak Corporation Plc (BCP) plans to resume focusing on its upstream petroleum business expansion after global oil prices have climbed above US$60 per barrel.
President and chief executive Chaiwat Kovavisarach said oil prices have gradually climbed above $50 (1,601 baht) since the second half of last year.
He forecast that prices will stay above $60 throughout the year, pushing the mostly state-owned Bangchak to resume its business expansion in the near future.
The company enlarged its upstream petroleum business by acquiring Nido Petroleum Co's assets through wholly owned subsidiary BCP Energy International.
Nido operates petroleum exploration and production activities in Galoc, Nido and Matinloc (Philippines), with an average output of 4,500 barrels of oil equivalent per day.
The company is conducting exploration activities in West Linapacan, Philippines and Gurita, Indonesia.
But after global oil prices collapsed in 2014, petroleum output at some resources declined because of lower margins and losses.
"Once the price stays at $70 for some time, the company will refocus on these assets," Mr Chaiwat said, adding that the price is around $68 a barrel.
In the domestic market, Bangchak could participate in the auction for the Erawan and Bongkot gas blocks in the Gulf of Thailand, whose concessions are set to expire in 2022-23, if the terms of reference match the company's business direction. The auction will be announced this half of 2018.
For Bangchak's biofuel business, the company set up a joint venture called BBGI Co last year. Bangchak holds a 60% stake in BBGI and Thailand's top sugar miller, Khon Kaen Sugar Industry Plc, controls the rest.
Bangchak biofuel assets have subsequently been transferred to BBGI, which is slated to go public in the third quarter to acquire funding for expansion through an initial public offering (IPO).
BBGI operates a biofuel production facility with a combined capacity of 1.71 million litres a day, including methyl ester or pure biodiesel at 810,000 litres daily and ethanol at 900,000 litres, whose feedstock is molasses and crude palm oil.
The IPO programme and financial adviser have yet to be disclosed, but the company aims to produce value-added goods such as cosmetics, medicine, packaging, skincare and cleaning products.
In related news, Bangchak yesterday granted master franchise rights for its Inthanin Coffee chain to RCG Retail Group of Cambodia. Through that deal, the company aims to open 100 branches in Cambodia and Laos.
Inthanin Coffee branches will be launched in Siem Reap and Phnom Penh this quarter, while the first Laos location is to open in the third quarter.
For the fuel retail business, Bangchak is allocating 1.7 billion baht this year to expand the number of petrol stations to 1,200 branches from 1,115.
Bangchak expects sales volume from this channel to grow by 10% from 500,000 litres per station per month on average, compared with a 6% rise last year. The company controls 15% of the fuel retail market, putting it in second place.
BCP shares closed yesterday on the Stock Exchange of Thailand at 42 baht, up 75 satang, in trade worth 608 million baht.