BCP sells Galoc stake for $20m

Other as­sets in the Philip­pines re­main

Bangkok Post - - NATIONAL - YUTHANA PRAIWAN

SET-listed en­ergy firm Bangchak Cor­po­ra­tion Plc (BCP) has de­cided to sell its en­tire 55.8% own­er­ship of Galoc oil field in the Philip­pines for a to­tal value of US$20 million or 666 million baht.

BCP’s board of direc­tors re­solved to sell this oil field as­set on July 12 to Ta­marind Galoc Pte.

BCP owns the field through its wholly-owned Nido Pe­tro­leum Pty Ltd (Nido), which it ac­quired in 2014 for $113 million.

The sale will not af­fect BCP over the long term be­cause Nido has other pro­duc­tive pe­tro­leum fields not in­cluded in the deal, such as Nido and Matin­loc fields in the Philip­pines.

Nido also has li­cences to ex­plore and de­velop pro­duc­tion at six fields in West Li­na­pacan, the Philip­pines and Gu­rita in In­done­sia.

“Cash from the deal is ex­pected to pro­vide liq­uid­ity for our ex­ist­ing busi­ness to ac­quire new en­ergy field as­sets,” said Chai­wat Ko­vav­is­arach, chief ex­ec­u­tive and pres­i­dent.

He said the sale will not af­fect Nido’s fi­nan­cial per­for­mance be­cause it has sev­eral other pe­tro­leum fields to drill and de­velop.

The Galoc field is also in the last stage of pro­duc­tion life, ex­pected to be de­pleted af­ter two years.

Fur­ther­more, up­stream pe­tro­leum pro­duc­tion will not be in­ter­rupted be­cause BCP ac­quired a 45% stake of Okea AS, a Nor­we­gian up­stream oil and gas firm last month.

Okea owns the ma­jor­ity of the Drau­gen and Gjoa pe­tro­leum fields. A/S Norske Shell owns the re­main­der.

The new deal will in­crease the daily pe­tro­leum out­put to nine kilo bar­rels of oil equiv­a­lent (KBOED) for BCP, ex­clud­ing the Galoc field, from only two KBOED now.

BCP spent 3.76 bil­lion baht last month on this ac­qui­si­tion, which is ex­pected to be com­pleted by Novem­ber.

BCP’s sub­sidiary in Sin­ga­pore, BCPR, jointly in­vested in the A/S Norske Shell pe­tro­leum fields with Seacrest Cap­i­tal Group.

BCPR will agree to sub­scribe to up to 90% of the in­creased cap­i­tal in Okea through new shares. Once the trans­ac­tion is com­pleted, BCPR will hold 45% of Okea shares.

A/S Norske Shell in­tends to spin off nu­mer­ous as­sets af­ter merg­ing with BP Group in 2015. This deal is also in­cluded in Shell’s busi­ness plan.

Mr Chai­wat said this deal is worth the huge bud­get al­lo­ca­tion be­cause Okea has high po­ten­tial for in­creased crude oil yield.

Last year, the de­vel­op­ment cost for pe­tro­leum pro­duc­tion av­er­aged $17 per bar­rel.

“The part­ner­ship with Seacrest, with pe­tro­leum as­sets in the North Sea and Brazil, will lead to ca­pac­ity ex­pan­sion in the near fu­ture,” said Mr Chai­wat.

Seacrest is an in­vest­ment fund fo­cused on off-shore oil and gas op­er­a­tions glob­ally.

“The Drau­gen and Gjoa oil fields are world-class as­sets that have been pump­ing light crude oil for a long time,” he said.

These as­sets are ap­pro­pri­ately priced and crude oil grade aligns with BCP’s oil re­fin­ery com­plex in Phra Khanong district, he said.

Chai­wat: Deal pro­vides liq­uid­ity for other as­sets

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