Thailand: PTT seeks an upward curve

Thailand: PTT seeks an upward curve

THAILAND'S leading energy conglomerate PTT will set up a US$45 million
(Bt1.6 billion) venture capital fund as part of its search for the new
S-curve, said its chief executive Tevin Vongvanich.

"The PTT board recently approved the plan to establish the corporate venture
capital because we are seriously exploring for the new S-curve," he said.

S-curve generally refers to new drivers for higher growth as an enterprise
enters or expects to enter maturity or a decline in its existing businesses.


The PTT venture capital will focus on four key technologies including those
related to energy, digital, and robotics, said Tevin.

PTT will from this year focus more on the electricity value chain as
consumers are expected to shift from being a direct consumer of oil and gas
to consume more electricity.

"Within this year, there might be clarity on [our] investment in the energy
storage business," Tevin said.

Toemchai Bunnag, chief executive of Global Power Synergy, the publicly
listed power and utility subsidiary of PTT, said the company expected to
have some "good news" this year related to its investment in 24M
Technologies Inc, a US-based battery start-up which is researching and
developing what it hopes is a breakthrough lithium-ion technology.

Speaking at a media conference, Tevin also elaborated on PTT group's new
approach to drive its liquefied natural gas (LNG) business through the
formation of a joint venture with its subsidiary PTT Exploration and
Production (PTTEP). The joint ventures involves investing in the whole LNG's
value chain, spanning from the upstream oil and gas production, to
liquefaction plants, to the LNG shipping business.

Bribery scandal

"This is similar to in Myanmar where we have jointly invested in the [gas]
fields [that we buy and pipe the gas to Thailand]," he said.

Concerning Rolls-Royce alleged bribery case, Tevin said a PTT |committee set
up to investigate |the case would submit its report to the PTT board of
directors on Thursday as the committee's works would reach a 30-day
milestone on that day.

Tevin said he was not certain if the report, to be submitted to the National
Anti-Corruption Com-mission, would name persons involved with the alleged
bribery case. The US Justice Department recently claimed PTT and PTTEP
employees accepted bribes of more than Bt385 million from the British
engineering group.

The board will also be presented with the firm's financial results for 2016
on Thursday.

Meanwhile, Tevin said PTT had proposed the government utilise its 2,000 rai
(320 hectares) plot of land adjacent the PTT's sponsored Vidyasirimedhi
Institute of Science and Technology in Rayong to build an innovation centre
that would house research units of various universities, especially in
robotics |technology.

Robotics is one of the future industries that the government has targeted to
promote to drive as a new S-curve for the economy. The government is
reportedly also considering land offers from other developers.

PTT expects oil prices to stay at $50 a barrel this year. The energy group
has earmarked a Bt1.6 trillion budget for investment in the next five years,
plus a provisional budget of nearly Bt300 billion if conditions and
opportunities allowed.

The largest projects include the fifth gas pipeline transmission, and
LNG-receiving terminal projects in Thailand, as well as a LNG floating
storage regasification unit in Myanmar that PTT will seek approval for from
the Thai and Myanmar governments around the middle of this year.

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com