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The state-run oil and gas developer has Low costs are now why the company is seek-
announced plans to use the current downturn in ing to expand, despite harbouring plans to cut
international oil and gas prices to snap up energy this year’s capex budget of $4.61bn by 15-20%,
assets, highlighting both the near and far abroad or $691.5-922mn. The cuts were driven by a 28%
as of interest. quarter-on-quarter contraction in net profit in
PTTEP has acquired a number of new oil and January-March to $275mn.
gas fields in recent years, both at home and over-
seas, as it shores up its production figures in the If you’d like to read more about the key events shaping
face of declining domestic potential. Since peak- Asia’s oil and gas sector then please click here for
ing at 489,000 barrels per day in 2016, Thailand’s NewsBase’s AsianOil Monitor.
oil production slowly declined to 477,000 bpd
in 2019, according to BP’s Statistical Review of Downstream: Aramco acquires SABIC
World Energy 2020. Saudi national oil company (NOC) Saudi Ara-
After unveiling plans to slash its capital mco has closed its $69bn acquisition of a major- Saudi Aramco
expenditure budget in April, owing to the twin ity share in petrochemicals giant SABIC from is bringing
pressures of collapsing oil prices and the coro- sovereign wealth fund PIF. That the transac-
navirus (COVID-19) pandemic’s destruction of tion was between two state-controlled entities SABIC’s vast
demand, PTTEP believes now is the right time to explains why it was able to go ahead despite the
go bargain hunting and wants to open talks with market uncertainty. But Aramco, which now petrochemicals
financially troubled upstream players, company has private shareholders to consider, negotiated
CEO and president Phongsthorn Thavisin told a longer payment schedule. capacity into
the Bangkok Post on June 19. He added that the By bringing SABIC’s vast petrochemicals the fold
company was eyeing assets in South-east Asia capacity into the fold, Aramco wants to develop
and the Middle East. its downstream business into an effective hedge
“We should not close our eyes to a big chance against oil market volatility. But in the short term,
in these regions. But if opportunity emerges else- SABIC will be a financial burden. The company
where, we must first make sure we have prospec- has suffered two consecutive quarterly losses in
tive buyers [for our oil] in those regions,” he said. a row, on weaker demand for petrochemicals in
The company believes it can afford to splash Asia and excess global supply.
out on new assets, having built up a sizeable war Elsewhere, Nigeria is looking to build a new
chest in recent years while slashing operating 200,000 bpd condensate refinery to ease reliance
costs. Thavisin said PTTEP had $3bn of cash on fuel imports, with a final investment decision
on hand and could also raise additional funding (FID) due to be taken on its first train before the
should the right deal come along. end of July, state-owned NNPC has said. The
The company has focused on cutting its cost country is also intending to repair and upgrade
base in the years following the last oil price crash its existing plants, but progress has been slow.
in 2014. Indeed, Thavisin said in April that the Meanwhile, a Dubai-based firm called Eco-
company’s per unit costs amounted to $31.7 per mar has started up a new oil refinery in Fujairah,
barrel, noting that this was “low and competitive, building on the UAE port’s status as a major hub
compared with our peers”. for oil trading, bunkering and storage.

Week 25 25•June•2020 www. NEWSBASE .com P7