Thailand: PTTEP sees two years of flat revenue growth

Thailand: PTTEP sees two years of flat revenue growth

SET-listed PTT Exploration and Production Plc (PTTEP) says it expects flat
revenue growth this year and next as low global oil prices are likely to
persist along with weak demand as the world economy remains fragile.

With no increase in, 2016 and 2017 revenues are likely to be the same as
last year's at US$5.65 billion, says president and chief executive Somporn
Vongvuthipornchai.

"We don't expect to see anything different from what we have seen over the
past few years, so we expect flat revenue this year and next year. It should
be close to $5.65 billion, what we had in 2015, " he said.

The downbeat outlook has forced PTTEP to cut its total operating blocks both
in Thailand and overseas down to 130 from 140 in the previous year, said Mr
Somporn.

"That is still sufficient to produce to meet demand and also match the
current situation," he added.

On its investment plan, Mr Somporn said PTTEP has cut its capital
expenditure (capex) for this year to $1.7 billion, down from $2 billion set
early this year. The capex had been previously reduced from $3 billion and
$3.4 billion.

However, the latest capex of $1.7 billion this year is for operation and
maintenance, and excludes mergers and acquisitions, Mr Somporn said.

PTTEP will reveal its next year's investment plan in the last quarter of
this year, he said.

On future investment, Mr Somporn said the company would still focus on
projects at home and in the Asean region, including in Myanmar, Malaysia,
Indonesia and Vietnam -- countries with strong potential and growth.

"What we are interested the most is the project in Myanmar, the deep-sea
petroleum block of MD-7," he said.

PTTEP signed a contract with the Myanmar government in May 2013 for MD-7 and
MD-8 blocks. It plans to partner with Total E&P Thailand to develop the
projects.

"PTTEP has a contract to explore the blocks, which we are now doing for
MD-7. We expect substantial gas reserve from the block and are in the
process of getting a production contract from the Myanmar government," he
said. Production would begin shortly start after the contract is granted, he
added.

Mr Somporn said PTTEP is also eyeing Indonesia, but would choose to invest
there through mergers and acquisitions.

PTTEP also holds occasional talks with the Vietnamese government over an
offshore petroleum block, which has been indefinitely delayed due to
Vietnam's indecision.

However, he said: "We will revive the project in Vietnam again if the
situation changes."

Mr Somporn said PTTEP has a total production capacity of 370,000 barrel of
oil equivalent per day from 20 operating projects. It has a total of 38
projects.

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Ref:
http://www.bangkokpost.com/business/news/1100917/pttep-sees-two-years-of-fla
t-revenue-growth

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com