PTT Plc, the national oil and gas conglomerate, says it will continue with plans for mergers and acquisitions (M&A) in Asia-Pacific after Opec and non-Opec nations' recent agreement to cut production.
PTT will proceed according to plan, though acquisitions will be harder because the value of petroleum assets is likely to rise, said Wirat Uanarumit, chief operating officer for upstream petroleum and gas business.
He said PTT is keeping its estimate of average global oil prices at US$50-$55 a barrel next year despite the world's major oil producers insisting they will remove a huge amount of supply from the market.
"The surplus of global oil inventory remains high and it may take almost three years to reach a balance as global oil demand is not that high," Mr Wirat said.
He said the movement of oil prices would be more clear in the second half of next year, when demand and supply should be evaluated.
However, oil prices are unlikely to revisit the highs of $100-120 a barrel because the production areas are scattered around the world and they are unlikely to be completely controlled by the agreement as they were in the past.
Mr Wirat said PTT has held several talks with operators of petroleum resources, but no deal has been finalised although the group has cash on hand of about 400 billion baht, which is more than enough for M&A.
PTT Exploration and Production Plc accounts for the lion's share of the total 400 billion baht.
During the time that global oil prices collapsed, many petroleum projects have suspended development and production. However, these projects are expected to resume once prices rise above $50 a barrel, compared with an average of $40 when they were forced to halt development.
Chief executive Tevin Vongvanich said it would take some time for global oil prices to rise since demand is not very high as the global economy remains fragile.
"A price of $50 per barrel would be a balance point because over a decade ago the price was too high at $120 and dropped to a low of $20," Mr Tevin said. "Now, it is neither too high nor too low."
He said the company is preparing to develop technology to match changing demand as the energy sector shifts from fuel to electrical power.
In 2014 PTT acquired a 17% share in Massachusetts-based startup 24-M Technologies Inc to start research and development for lithium batteries through GPSC Plc, its subsidiary.