Thai en­ergy firm seeks new as­sets

New Straits Times - - Business -

BANGKOK: The Asian en­ergy com­pa­nies sit­ting on the largest hoard of cash out­side China are ready to put it to use.

Thai­land’s PTT Ex­plo­ration and Pro­duc­tion Pcl (PTTEP) and its par­ent com­pany have US$11 bil­lion (RM48.73 bil­lion) com­bined in cash and mar­ketable se­cu­ri­ties, such as bonds and other short-term in­vest­ments.

The ex­plorer was ready to spend from its por­tion on projects and ex­plo­ration acreage to rescue de­clin­ing oil and gas re­serves, ac­cord­ing to chief ex­ec­u­tive of­fi­cer Som­porn Vongvuthiporn­chai.

PTTEP was eye­ing early-life pro­duc­ing as­sets or projects that were al­ready sanc­tioned and ready for de­vel­op­ment, he said.

It’s also look­ing to work with its par­ent, PTT Pcl, to in­vest in liq­ue­fied nat­u­ral gas plants, which would help feed the coun­try’s grow­ing de­mand.

“We’ll have to rely on merg­ers and ac­qui­si­tions to main­tain our growth,” said Som­porn. “We’re look­ing at op­por­tu­ni­ties in the few hun­dred mil­lion to US$1 bil­lion range.”

There was no such hunger when Som­porn took the reins of the up­stream com­pany in Oc­to­ber 2015. Oil prices had al­ready fallen from the US$100 a bar­rel range into the US$60s, and he watched as over his first six months they cratered be­low US$30 to hit the low­est in more than a decade.

He kept the firm fo­cused on weath­er­ing the down­turn by cut­ting costs and in­vest­ments.

Mean­while, proved re­serves have fallen from the equiv­a­lent of 1.1 bil­lion bar­rels of oil in 2009 to 695 mil­lion last year. That will last just five years at its cur­rent pro­duc­tion rate.

“They have a rel­a­tively short re­serves life and it’s pretty clear they’re go­ing to have to ac­quire to grow as a firm,” said Neil Bev­eridge, an an­a­lyst with San­ford C. Bern­stein. He has a neu­tral rat­ing on the firm. Bloom berg

Som­porn Vongvuthiporn­chai

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