PTTEP eyes E Africa but stays mum on plans to bid for British firm
PTT Exploration and Production yesterday refused to confirm whether it would bid for UK-based petroleum exploration and production company Cove Energy, but PTTEP president and chief executive officer Anon Sirisaengtaksin acknowledged that East Africa was
Cove Energy this month announced that it was selling its business. The company became more attractive after it discovered the potential to develop petroleum projects in Rovuma Area 1 off Mozambique, where gas reserves of 15 trillion to 30 trillion cubic feet are expected. Many E&P companies including BP, Oil India and China National Offshore Oil Corporation have been named as those interested in buying Cove Energy. PTT has also been mentioned.
But Anon said it was too early to comment on whether the company would submit bidding documents for Cove Energy. The firm has to consider many factors before deciding to buy an oil-and-gas project. Apart from the promising size of the petroleum reserve, the return on investment, the investment during the E&P process, and the deal’s value are among important factors PTTEP needs to consider.
He said PTTEP was eyeing investments in many areas worldwide. It already has a presence in Algeria, in North Africa, and East Africa is also attractive for the company.
PTTEP has a strategy of pursuing mergers and acquisitions in both greenfield and existing projects to expand its business overseas and secure petroleum for the country’s energy stability.
It is reported that Cove Energy will close the submission of bid documents next month. The value of the deal is expected to be as high as US$1.2 billion (Bt37 billion).
Pailin Chuchottaworn, president and CEO of PTT, said Africa was in its investment spotlight; however, it was not easy to make such moves as Africa is quite new to the E&P business, and political conflicts remain widespread.
In a separate matter, Pailin said PTT would like the Finance Ministry to come up with a clear plan on reducing its share in the energy giant below 50 per cent – privatising it, in effect – by transferring part of its stake to the Wayupak Fund. The lack of clarity on this issue has affected PTT’s image and investors’ confidence.
He said such a share transfer might not affect PTT significantly as the ministry had previously diluted its share by 15 percentage points from around 65 per cent in 2002-2003.
Chief financial officer Tevin Vongvanich said PTT would seek an opportunity to talk about this matter with its labour union, which has expressed concern about the proposed share transfer.
