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Newly appointed CEO Auttapol Rerkpi- and it is counting on a similar buying spree
boon said the group was tackling the “dou- during the current downturn to yield similar
ble effects” of the oil price slump and the success.
COVID-19 pandemic. PTT’s direct budget Net profit in 2019 increased by 40% year
will be trimmed by THB15bn ($484.2mn) to on year to $1.57bn after the company acquired
THB54bn ($1.74bn). Murphy Oil’s assets in Malaysia, Portugal-based
“All the projects that have been approved will Partex Holding, which has assets in the Middle
go forward, but we will review and prioritise East and Africa, and additional stakes in the
those in the pipeline,” Rerkpiboon told media. Bongkot field. The company said the new ven-
He added that PTT intended to expand its over- tures had helped to lift sales volumes by 15% y/y
seas gas business while transforming itself into a in 2019 to 350,651 barrels of oil equivalent per
regional liquefied natural gas (LNG) trader. day (boepd).
This focus on gas was echoed by Thavisin Oil and gas producers will likely see their bot-
last week, who said the company was aiming to tom lines bounce back in 2021, in line with the
increase gas sales from 70% of volume to 80%, anticipated global economic recovery. However,
while oil sales would fall from 30% to 20%. The achieving growth after oil and gas prices have
company anticipates a contraction in oil demand bottomed out is something of a given.
in line with the push for renewable and low-car- The US Energy Information Agency (EIA)
bon energy solutions. has projected that the Brent benchmark will
Adjusting its sales mix is certainly in line average just $38.02 per barrel this year and
with Thavisin’s comments in April that PTTEP $47.88 next year, after averaging $64.37 in 2019
needed to adapt to disruptions if it wanted to and $71.19 in 2018. Against this backdrop Thav-
find growth. The executive said at the time that isin is quite correct that growth will require more
the company needed to do more than simply than just cost cutting.
focus on cost cutting, with agility highlighted as PTTEP is unlikely to be the only NOC to
a desirable attribute going forward. embrace growth through acquisitions during
PTTEP’s decision to pursue acquisitions this troubled time for the energy industry. IOCs
whilst international oil companies (IOCs) and report to their shareholders and must show they
national oil companies (NOCs) are reducing are capable of delivering dividends. State-backed
their risk profiles indicates the Thai developer companies are also dividend focused, contribut-
has embraced that agile outlook. ing large sums of money to state budgets, but
they are driven to protect national energy secu-
Past experience rity. Securing this objective during a downturn
PTTEP saw its bottom line surge last year follow- can often be achieved by buying cheap oil and
ing several domestic and overseas acquisitions, gas fields.™

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