In an interview, PTTEP chief executive Phongsthorn Thavisin lays out the company’s plan to succeed on all fronts.
Chief executive Phongsthorn Thavisin is prepared to succeed on all fronts, writes Yuthana Praiwan
Phongsthorn Thavisin was appointed chief executive of PTT Exploration and Production Plc (PTTEP), the SET-listed oil and gas drilling firm, in early October. His previous position was president for exploration and production and acting executive vice-president for the business transformation and organisation group at PTTEP.
The 59-year-old’s business vision includes a huge transformation: digital, data technology, cleaner energy and energy resources. Mr Phongsthorn spoke with the Bangkok Post.
What is PTTEP’s business plan for the next few years?
We have transformed all business segments since the global oil price collapse in 2014. The first thing was cutting production cost, and it could drop from above US$40 per barrel of oil equivalent to $30.
We are one of the top global companies with one of the lowest production costs compared with other exploration and production (E&P) peers in this industry.
The next step is to expand new energy resources f aster and accelerate the resources in the pipeline because we forecast oil prices will come to be stable over the next two years.
The expansion will cover new investment, joint development and asset acquisitions.
In our working system, we moved to a teamwork format for every business unit, so a single hero is not necessary.
PTTEP is setting up an artificial intelligence and robotics venture company, which we will allow to operate freely.
The new firm’s job is fundamentally to invent equipment and machines involved with E&P activities such as remote-operated vehicles and drones.
In 2019, the new firm will start operations and will provide services to other PTT companies.
Next year, another new business, a collaborative gas-to-power project with sister firm Global Power Synergy Plc will be developed at a gas-fired power plant in Myanmar.
What distinguishes PTTEP from E&P firms in emerging countries that are searching for new energy resources?
We are trying to maintain our position among the top global companies with low production costs, and we have recently announced the Energy Partner of Choice project that creates a win-win situation for shareholders, clients, suppliers, new graduates who are coming to work with us and media when they deal with PTTEP.
We want to make new graduate students prioritise working with PTTEP, and we will respond with good salaries and promoting the right people to the right jobs.
We want to make a good impression in each country where we expand our business presence, from central governments to local communities, so that whenever they need an E&P firm, they will choose to deal with us because we come with a friendly approach.
We are focusing on data technology because our drilling jobs will be more efficient through big data and the Internet of Things, so we will implement this technology in drilling jobs such as underground oil and gas pockets to make our data more accurate.
With renewable energy becoming a mainstream resource in many countries, how do you think that will impact fossilbased resources?
The trend of greener and cleaner energy has strengthened over the past four years, and many agencies estimate renewable energy will become cost-competitive against fossil-based energy.
PTTEP estimates that renewable energy resources have yet to be moderated for widespread consumption.
People have high hopes that energy storage technologies will save electricity through lithium-ion batteries, which we think can be cost-competitive and provide stable power supply.
What about PTTEP’s business expansion in 2019?
We will have fast business expansion because of the stability of global oil prices. We are looking for asset acquisitions and new development licences next year.
Southeast Asia and the Middle East are the main strategic regions we will focus on. The Middle East is opening for new business partnerships across the world, and we plan to bid for the E&P licences in the United Arab Emirates from this year onwards and resume our expansion in Oman after abandoning it many years ago.
Southeast Asia has opened for overseas investors; for example, Indonesia and Malaysia have several concessions of E&P licences that are going to expire in the next two years.
At home, PTTEP hopes to win the Erawan and Bongkot gas blocks in the Gulf of Thailand next month by making good offers to the government, including gas prices and benefit sharing.
What will global oil prices be like in 2019?
Prices are fluctuating a lot during this half, and many oil analysts estimate that the trade sanctions on Iran will result in higher prices, but after the sanctions were implemented, prices have yet to move as expected.
PTTEP forecasts a range of $70 per barrel in the remainder of this year and a slight increase during 2019-20, but prices will stabilise after 2020.