Thai oil company PTTEP has earmarked $3,1 billion dollars for investments in 2018 and is planning to accelerate final investment decisions for three projects this year.
Of the full budget, $1,77 billion will be capital expenditure, and $1,3 billion is for operational expenditure (opex).
This year’s capex will be mostly spent to maintain the production level at 302,000 BOED, primarily focusing on increasing crude oil and condensate production volumes. PTTEP expects the unit cost will also be sustained at around $30 per BOE “to strengthen PTTEP’s competitiveness.”
The company’s business plan for this year to add more production in the future is to accelerate the FID of 3 key pre-development projects including the Mozambique Rovuma Offshore Area 1 project, the Algeria Hassi Bir Rekaiz project and the Vietnam Block B & 48/95 and Block 52/97 project.
Planned to start first gas in 2023 with a production capacity of 12 million tonnes per year, the Mozambique Rovuma Offshore Area 1 Project has already started the resettlement activity and is waiting for the approval of development plan, PTTEP said.
PTTEP late last year submitted the development plan of the Algeria Hassi Bir Rekaiz project to the Algerian Government and anticipates the approval in the first quarter of this year. The Vietnam Block B & 48/95 and Block 52/97 project is targeted to produce first gas in 2021 with a capacity of 490 million cubic feet per day.
Somporn Vongvuthipornchai, Chief Executive Officer of PTTEP said: “This year, PTTEP will absolutely join the bidding process of the expiring concessions – Bongkot and Erawan – in order to enhance our petroleum reserves and production volumes. This is critical for building the country’s energy security. Apart from that, we will keep our eyes open for the investment opportunities in the strategic locations including Thailand, Southeast Asia, and the Middle East. We also have plans to expand our investment along the gas value chain in countries where we can build our competitive advantage upon our upstream presence.”
In 2017 PTTEP generated total revenues of $4,5 billion, up from $4,3 billion in 2016.
The company saw recurring net income of $836 million, an 80% increase from a year earlier. The increment, PTTEP said, was mainly due to the recovered average selling price of $39.20 per barrel of oil equivalent (BOE) from $35.91 per BOE, while unit cost was lowered from $30.46 per BOE to $29.05 per BOE. The average sales volume last year, however, was impacted by lower demand for natural gas from projects in the Gulf of Thailand.
PTTEP said it mitigated the impact by increasing condensate and crude oil volumes, which finally helped the company to maintain the average sales volume as planned at 299,206 barrels of oil equivalent per day (BOED). By end of 2017, PTTEP could maintain strong liquidity position with cash on hand of USD 4,468 million (equivalent to THB 146,008 million)
Update: February 1, 2018
The previous version of the article said that “Thai oil company PTTEP has earmarked $3,1 billion dollars for investments in 2018 and is planning to make final investment decisions for three projects this year.”
PTTEP subsequently told Offshore Energy Today: “PTTEP’s plan this year is to accelerate the FID of 3 key pre-development projects including the Mozambique Rovuma Offshore Area 1. However, whether we can make it as planned or not depends on several conditions. With note that our partners and us will try our best to push forward the FID for the sake of serving energy demand in Mozambique.”
Offshore Energy Today Staff