PTTEP sees two years of flat revenue growth
Low oil prices and demand to hit output
SET-listed PTT Exploration and Production Plc (PTTEP) says it expects flat revenue growth this year and next as low global oil prices are likely to persist along with weak demand as the world economy remains fragile.
With no increase in, 2016 and 2017 revenues are likely to be the same as last year’s at US$5.65 billion, says president and chief executive Somporn Vongvuthipornchai.
“We don’t expect to see anything different from what we have seen over the past few years, so we expect flat revenue this year and next year. It should be close to $5.65 billion, what we had in 2015, “he said.
The downbeat outlook has forced PTTEP to cut its total operating blocks both in Thailand and overseas down to 130 from 140 in the previous year, said Mr Somporn.
“That is still sufficient to produce to meet demand and also match the current situation,” he added.
On its investment plan, Mr Somporn said PTTEP has cut its capital expenditure (capex) for this year to $1.7 billion, down from $2 billion set early this year. The capex had been previously reduced from $3 billion and $3.4 billion.
However, the latest capex of $1.7 billion this year is for operation and maintenance, and excludes mergers and acquisitions, Mr Somporn said.
PTTEP will reveal its next year’s investment plan in the last quarter of this year, he said.
On future investment, Mr Somporn said the company would still focus on projects at home and in the Asean region, including in Myanmar, Malaysia, Indonesia and Vietnam — countries with strong potential and growth.
“What we are interested the most is the project in Myanmar, the deep-sea petroleum block of MD-7,” he said.
PTTEP signed a contract with the Myanmar government in May 2013 for MD-7 and MD-8 blocks. It plans to partner with Total E&P Thailand to develop the projects.
“PTTEP has a contract to explore the blocks, which we are now doing for MD-7. We expect substantial gas reserve from the block and are in the process of getting a production contract from the Myanmar government,” he said. Production would begin shortly start after the contract is granted, he added.
Mr Somporn said PTTEP is also eyeing Indonesia, but would choose to invest there through mergers and acquisitions.
PTTEP also holds occasional talks with the Vietnamese government over an offshore petroleum block, which has been indefinitely delayed due to Vietnam’s indecision.
However, he said: “We will revive the project in Vietnam again if the situation changes.”
Mr Somporn said PTTEP has a total production capacity of 370,000 barrel of oil equivalent per day from 20 operating projects. It has a total of 38 projects.