SET-listed oil and gas drilling firm PTT Exploration and Production Plc (PTTEP) has announced a five-year investment plan for 2019-23 to accommodate value-added assets through exploration and production (E&P) activity and support investment opportunities domestically and overseas.
Phongsthorn: Three main objectives
The investment budget of US$16.11 billion (525.06 billion baht) excludes two new bids, the Erawan (G1/61) and Bongkot (G2/61) gas fields in the Gulf of Thailand, that PTTEP won last week.
Chief executive Phongsthorn Thavisin said the massive budget is aimed at PTTEP's long-term growth.
PTTEP has set aside a 2019 budget for its subsidiaries of $3.26 billion, of which $1.84 billion is allocated to capital expenditure and $1.42 billion to operating expenditure.
"PTTEP also targets average petroleum sales volume of 318,000 barrels of oil equivalent per day (BOED)," Mr Phongsthorn said.
The allocation of 2019 capital spending is divided into three main business objectives.
The first is to maintain production plateau at existing projects in Thailand and Myanmar with spending of $1.16 billion. These projects include many fields: S1, Bongkot, Arthit, MTJDA and Zawtika.
The second is to increase petroleum reserves and future production. PTTEP plans capital spending of $490 million to support the final investment decisions for key development projects such as Mozambique's Rovuma Offshore Area 1, Algeria's Hassi Bir Rekaiz, Vietnam's B & 48/95 and 52/97, and Contract 4 Ubon.
For the third objective, the company is allocating $191 million for E&P activity in Myanmar and Malaysia to support long-term growth.
PTTEP plans a more active strategy of maximising value of existing E&P assets by applying new technology to enhance operational efficiency, while at the same time maintaining competitive cost from 2019 onwards.
"We target to increase competitiveness through our business diversification plan, which focuses on investments in the gas value chain business, robotics and artificial intelligence, as well as renewable energy," Mr Phongsthorn said. "So this diversification will create long-term growth and sustainability for PTTEP."
Under the five-year investment plan, PTTEP predicts average petroleum sales volume to decline to 235,000 BOED by 2023 from existing assets.
But the contract figure has yet to incorporate the results of the expiring petroleum concessions for Erawan in 2022 and Bongkot in 2023.
PTTEP currently runs the concession for Bongkot and has a marginal ownership in Erawan, which is operated by US-based Chevron.
The Erawan and Bongkot blocks have a combined production of 2,110 million standard cubic feet per day, contributing up to 75% of gas production from the Gulf of Thailand.
