PTT units told to hedge against slide in oil price

Former PTT chief executive officer Prasert Bunsumpun, who now serves as a director on the PTT board, said the stagnant global economy had pushed down the price of oil, so the group had to implement risk-management measures to maintain revenue this year. The falling oil price will definitely affect its petrochemical and refinery businesses in the current fourth quarter.
The global oil price is expected to average US$90-$100 per barrel this year, down from the previous estimate of $100-$110.
Prasert said PTT had told its petrochemical and refinery businesses to try to prevent their financial performance from being affected by the ebbing oil price, and hedging is one of the preventive measures.
The group does not want a repeat of the situation in 2008 when the global financial crisis saw its petrochemical and refinery businesses post losses of Bt20 billion in the fourth quarter. The loss resulted in a sharp decline of the group’s consolidated revenue that year to Bt50 billion.
PTT Group posted consolidated revenue of Bt68 billion in the first half of this year and is expected to show strong profit figures in the third quarter.
Prasert expects that the average oil price next year will stay between $90 and $100 per barrel.
However, if a severe economic decline forces the oil price down to $70-$80, this would definitely hit PTT’s profit.
He said the economic problems in the United States and Europe could be an opportunity for Thai conglomerates to expand by acquiring businesses overseas.