Sea Oil considers upside to solar rooftops
Company seeks new income after 2017 dip
MAI-listed Sea Oil Plc, a marine oil and chemical trader, is conducting a feasibility study to enter the solar rooftop business in a bid to return to a healthy balance sheet.
The move is further part of the company’s business diversification efforts.
Chairman Apisit Rujikeatkamjorn said Sea Oil is looking to install solar rooftop power-generation systems at its own buildings and factories to test run the technology.
“We have yet to decide on a budget for the solar rooftops, but we think this sector is a rising star for many firms to incorporate at their operations. The installations can cut our power bills by 10-30%,” he said.
The tentative business model is to provide solar rooftop systems to generate electricity, expecting a return on investment in less than a year. Sea Oil plans to acquire assets producing 7-8 megawatts.
But the company does not hold a licence to be a solar operator, which is issued by the Energy Regulatory Commission, and cannot sell surplus electricity to the state utility.
Mr Apisit said Sea Oil’s business of oil trading has remained in the red. The company registered a loss on its balance sheet in 2017 due to the slowdown of oil and gas exploration and production (E&P) in the Thai market.
The majority of its revenue is in the marine oil trade and service business, with E&P taking centre stage as the Bongkot and Erawan Gas Block auctions and the Petroleum Round 21 have been delayed.
The company posted a loss of 52.8 million baht over the first nine months of 2017, while its full-year financial report will be disclosed soon.
Sea Oil’s revenue also came under pressure after its condensate separator unit in Rayong was forced to suspend operations due to a fire last November. The plant is undergoing maintenance, expecting to resume operations this quarter.
But Mr Apisit said the company expects some benefits from a new asset, having acquired a 50% stake in Pan Orient Energy Siam Co’s (POES) E&P business for 1.4 billion baht.
“POES can increase production of oil and gas again when global oil prices rise above US$70 per barrel. POES cut production to 400 barrels per day from 700 earlier, with oil prices resting below $50 since 2014,” he said.
Managing director Neeracha Panboonhom said Sea Oil is preparing a capital investment of 1-2 billion baht to start a new business and seeking new clients in the region in a bid to increase its overseas revenue to half of the total, up from 20% at present.
The company also plans to acquire new biomass and wind farm assets.
SEAOIL shares closed yesterday on the Market for Alternative Investment at 2.62 baht, up eight satang, in trade worth 2.17 million baht.