By an OGJ Online Correspondent
BANGKOK, Feb. 19 -- Thailand's Petroleum Exploration and Production PCL (PTTEP) has decided to expand its overseas portfolio by directly acquiring assets in other countries, abandoning a plan to exchange hydrocarbon assets with other companies.
PTTEP President Chitrapongse Kwangsukstith said the asset swap plan, introduced about a year ago, did not work well primarily because the prices of developed fields, especially oil, have become prohibitive now that world oil prices have rebounded.
Only one deal was struck under that asset-swapping program. Unocal Corp. and Moeco Thailand Co. acquired a combined 20% stake in PTTEP's Arthit gas prospect in the Gulf of Thailand, and PTTEP gained a 10% interest in gas-bearing blocks B and 48/95, off southwestern Viet Nam. Unocal operated the Viet Nam blocks (OGJ Online, Aug. 9, 2000).
PTTEP will continue to seek oil field interests, particularly in Iran, Oman, Yemen, and Sudan.
Chitrapongse emphasized overseas expansion was crucial to future growth of PTTEP.
He also said the company plans to invest 64 billion baht ($1.48 billion) over the next 5 years to boost its natural gas production and support exploration.
About 34 billion baht, or 53%, would be spent to raise capacity of Bongkot, Arthit, and Pailin gas fields in the Gulf of Thailand. The remaining 30 billion baht would be used mainly for working capital and interest.
With an investment of 13.2 billion baht, production at Pailin field will grow to 330 MMcfd next year from the current 165 MMcfd. Investment for Arthit field would be 10.6 billion baht, while the remaining 11 billion baht would go to Bongkot field.
Increased production from the fields would be used for domestic demand, which is expected to grow 6-8% a year. PTTEP's production should grow to 115,000 boe/d from 80,000 boe/d at present, he said.
Thailand's consumption of gas rose 11.4% last year to 2 bcfd, spurred by a 7.6% year-on-year rise in demand for electricity to 98,418 Gw-hr, according to PTTEP.
PTTEP and its subsidiaries expect profits of 4.4 billion baht for 2000, a rise of 25% over 1999. Chitrapongse based the estimate on the 9-month performance to Sept. 30 with total revenues of 15.5 billion and a consolidated net profit of 3.4 billion baht.
The expected sharp increase in profits was due to soaring petroleum prices and increased sales of gas from Pailin and Yadana fields in Burma's Gulf of Martaban.