PTT Exploration and Production Plc (PTTEP) says it is close to finalising an investment decision on three petroleum resources, delayed from last year due to the complicated process of obtaining licences from local and central governments and unclear business models.
The three projects are the Ubon block in the Gulf of Thailand, Rovuma Offshore Area 1 in Mozambique and the Hassi Bir Rekaiz project in Algeria, said Pannalin Mahawongtikul, executive vice-president for finance and accounting.
The decision on the three projects would help the SET-listed company re-focus business plans for projects that are still in the exploration stage, she added.
The strategy also includes mergers and acquisitions (M&A) of projects in Asia-Pacific although most of the targeted firms are US companies, Ms Pannalin said, adding that PTTEP is in talks over 3-4 M&A projects that are near the production stage. The negotiations are expected to be finalised early next year.
PTTEP has US$3.7 billion cash on hand, which is set to rise to $4 billion next year.
Mozambique's Rovuma A1 project requires a liquefied natural gas (LNG) facility as well as massive investment of $22 billion over the next 5-6 years. It is estimated to produce 12 million tonnes of LNG a year, of which 70% has already been contracted to major buyers, including PTT Plc.
Ms Pannalin said PTTEP holds an 8.5% stake in Rovuma A1 and the project needs about $1.9 billion capital expenditure.
Approval for the Ubon project is expected in 2018 and crude oil output is estimated at 25,000 barrels per day, while the Hassi Bir Rekaiz project is in the process of petroleum reserve appraisal, after which production would start.
PTTEP is reviewing its capex in line with recent developments. The average oil price next year may rise to $50 per barrel, compared with this year's average of $39.
Meanwhile, PTT announced that it posted a net profit of 26.9 billion baht in the third quarter of 2016, reversing from a net loss of 26.5 billion baht in the same period of last year.
The substantial rise in profit was largely due to lower feed gas costs, which fell in line with global oil price.
In the first nine months, PTT had a net profit of 75.5 billion baht, up from 19.7 billion year-on-year.
PTTEP closed Friday on the SET at 80.75 baht, down 75 satang, in trade worth 346 million baht. PTT shares closed at 335 baht, down six baht, in heavy trade worth 1.6 billion baht.