Forward thinkers seek Asian bargains

David Knott
London
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Although Asia's economic doldrums have not lifted, two companies have opened their checkbooks and are seeking investment opportunities.

The first bargain hunter in line was Conoco Inc., which intends to boost its presence through an investment of $2 billion in the Asia-Pacific region over the next 5 years.

The firm's global sales amounted to $23 billion last year, of which 1% came from Asia. Within 5 years, Conoco aims to earn 5% of its revenues from Asian countries.

On a visit to Bangkok, Conoco CEO Archie Dunham said, "We are currently on track to double the company's value by 2003 to $30 billion, relative to a 1995 base, with much of our growth coming from Asia."

Dunham described Asian prospects as "very bright," and said that, despite the economic and political difficulties, "We have a deep commitment to growth in this region."

R&M expansion

Investment in a 100,000 b/d capacity grassroots refinery in Malay- sia, with state oil firm Petronas and Statoil AS, is intended to anchor Conoco's downstream expansion in Asia.

Conoco recently opened its 100th Jet brand service station in Thailand. So far, the company has invested $121 million in its Thai retail chain, which it intends to expand to 200 stations over 3 years.

Conoco is looking to acquire stakes in oil refineries in the region to support retail growth. Dunham said, "If we find a very good opportunity, we'll invest."

Tractebel strategy

Meanwhile, Belgian utility Tractebel SA aims to become a key player in Asia's growing electric power and gas markets, where it foresees significant growth.

The Brussels-based firm is targeting Asian countries where electricity, gas, and energy industry restructuring and privatization are being introduced and implemented.

Initially, it is looking to gain a foothold in the Philippines, South Korea, China, and Malaysia and to expand in Thailand, where it has interests in power generation and natural gas distribution ventures.

Power push

In Thailand, Tractebel is looking to acquire stakes in existing independent or small power producer schemes that have secured sales agreements with the Electricity Generating Authority of Thailand.

Other target countries are Laos, Myanmar, Viet Nam, and Cambodia, all of which it will approach through its H-Power 50-50 joint venture with Thailand's Hemaraj industrial conglomerate.

A Tractebel official explained that Indonesia has been temporarily deleted from Tractebel's Asian investment prospects list because of its continuing economic and political turmoil: "We will look back at it again when the crisis is over."

The official said Tractebel is not looking to expand its Asian business by means of generating capacity increases but through taking on "quality" electricity and gas projects-those that offer more than 17% in returns on investment and in which it can assume management control.