TOP wants to triple net profit by 2030
CFP construction starts in 2020
Thai Oil (TOP), the country’s largest oil refiner, is set to triple net profit to more than US$1 billion by 2030 after the long-awaited Clean Fuel Project (CFP) starts operations in 2023.
For 2019-23, TOP earmarked capital expenditure of $4.83 billion for the CFP in Sri Racha district, Chon Buri province.
Wirat Uanarumit, newly appointed president and chief executive of TOP, said the CFP is scheduled to begin construction in the first quarter of 2020.
“The company will conduct a feasibility study to produce heavy and light naphtha products from the CFP. Both products are raw materials for petrochemical production during the project’s development period,” he said.
“TOP is searching for potential buyers of new naphtha products. They should be either existing or new petrochemical makers.”
Mr Wirat said a new naphtha business would take several years to finalise as part of the Beyond CFP strategy.
“Both CFP and Beyond CFP should help us reach net profit of over $1 billion in 2030,” he said.
In 2018, TOP posted net profit of $312 million.
Mr Wirat said CFP operation will revive TOP’s oil refinery process and raise the gross integrated margin (GIM) to $11 per barrel from $7 now.
Additional GIM will be gained from an expansion capacity to 400 kilobarrels per day (KBD) from 275 KBD now.
The refinery cost will be trimmed down from crude oil input.
TOP normally uses light crude oil for its refinery, which is more expensive.
CFP operation will allow TOP to use heavy crude oil for the refinery.
“Heavy crude oil is cheaper by $7 per barrel than light crude oil,” said Mr Wirat.
“Heavy crude oil will make up 50% of the crude oil input in the near future.”
The output of refined oil will raise light distillate output from 23% to 25% and middle distillate will increase from 53% to 62%.
The CFP will reduce the output of fuel oil to 13% from 17%.
Pattaralada Sa-Ngasang, executive vice-president for finance and accounting, said the CFP has the highest investment value for TOP.
Some 50% of the total investment will come from TOP’s cash flow, with the other half from debenture issuance and liability management, said Ms Pattaralada.
TOP issued US dollar senior unsecured and unsubordinated bonds totalling $565 million (17.1 billion baht) in value last Thursday.
The debentures have a 30-year maturity with a record-low fixed coupon rate of 3.50% per year.