By The Nation
The company is maintaining its readiness to build sustainable growth in the short and long terms, said president and chief executive officer Phongsthorn Thavisin, who highlighted PTTEP’s Expand and Execute strategy.
He said the company recorded recurring net income in the first quarter of $374 million, representing a rise of 23 per cent from $304 million in the same period of 2018. However, profits from non-recurring items were $20 million, decreasing from $119 million in the same reported period last year. This was mainly driven by lower appreciation of the baht against the US dollar, which has had little impact on the company’s cash flow, Phongsthorn said yesterday.
Those effects were behind the 7 per cent drop in first-quarter net income, from the $423 million posted for the same period last year.
For the first three months of 2019, the company’s total revenues were $1.42 billion, an increase of 15 per cent from $1.24 billion in the same period last year. This was primarily driven by improved average sales volume to 319,230 barrels of oil equivalent per day (BOED), compared with 293,099 BOED in the first quarter of 2018. The increased sales volume mainly resulted from the acquisition of additional participating interests in the Bongkot project in the Gulf of Thailand, coupled with a higher average selling price, which rose from $44.01 per barrel of oil equivalent (BOE) to $46.21 per BOE.
Consequenly, PTTEP has operating cash flow of $943 million and an earnings before interest, taxes, depreciation and amortisation (EBITDA) margin of 76 per cent at the end of the first quarter.
“PTTEP is moving forward with the new Expand and Execute strategy, which we’ve actively implemented since earlier this year and have successfully achieved several major milestones,” Phongsthorn said. “We marked our move in the Middle East by being awarded two offshore exploration blocks, along with our global strategic partners, in one of the world’s high-potential petroleum locations, the United Arab Emirates. We also extended our footprint in Southeast Asia by acquiring Murphy Oil Corporation’s business in Malaysia.
“This will help boost sales volume and sales revenue immediately,” Phongsthorn said. “PTTEP were awarded additional two offshore exploration blocks in Malaysia as well. The aforementioned investments will help PTTEP grow in both the short term and long term.”
Regarding the “expand” component of the strategy, PTTEP said it would mainly focus on investing in the region where it has expertise and experience, especially in Southeast Asia. The company will also invest in the Middle East, which is considered a petroleum-rich area, through partnerships with strategic alliances.
Phongsthorn said the company will move actively forward in developing artificial intelligence (AI) and robotics business through AI and Robotics Ventures Company Limited (ARV), to increase the efficiency in the petroleum exploration and production business, provide better safety in operations, minimise impacts on the environment and reduce operation costs.
Under the “execute” part of the strategy, PTTEP’s priorities are to increase production volumes and add value to its existing projects. This includes increasing petroleum reserves by accelerating exploration activities and making the final investment decision regarding key pre-development projects in the pipeline, such as the Mozambique Rovuma Offshore Area 1 project.
In addition, the company said it will efficiently carry out the transition of Bongkot and Erawan fields to ensure a consistency of natural gas production, while managing the production costs in order to increase its competitiveness through technologies and innovations.