Thai Oil plans $1.8 bn investments over 5 years

Veerasak said that of the total investment, about $989 million had already been approved by the company's board. Of that, the actual investment will be about $673 million, as the company has been awarded $316 million in tax privileges from the Board of Investment for its approved projects.
These include the procurement of two or three new ships for the transport of petroleum and petrochemical products, a paraxylene upgrade project, a Specialty WAX project worth $35 million, a $60-million equity expansion in Sak Chaisidhi Co (of which Top Solvent owns an 80-per-cent stake) to expand the high-quality hydrocarbon solvent business, a $334-million investment in small power producer (SPP) plants, and refinery and petrochemical efficiency and reliability improvements worth $381 million.
The other projects, worth about $856 million, which are under study, include a refinery upgrade and hydrocracker revamp worth $272 million, a benzene derivatives/linear alkyl benzene (LAB) project worth $218 million, a lube-base project worth $180 million, and jetty and logistics improvement and other projects worth $314 million.
Veerasak said that in the past, Thai Oil’s investments had been quite conservative, with a debt-to-equity ratio at 0.4:1. The company will seek for opportunities to create value from the raw materials and products it has on hand with the aim to raise its d/e ratio close to 1:1.
“There are some investment projects still not in our five-year investment plan, including a joint study with PTT on expanded investment in oil refineries, petrochemicals and power into Asean countries, especially those bordering Thailand, to serve the Asean Economic Community coming in 2015,” Veerasak said. “The company has already expanded its solvent business into Vietnam, and is looking for investment opportunities in Indonesia, Myanmar, Cambodia and Laos, which will be accomplished in later phases.”
He said Thai Oil anticipated the price of crude oil in Dubai, referenced by the refinery companies, at about $100 per barrel in the second half of this year, and the price should not go beyond the $120 seen in the first quarter. The company tries to keep its gross refinery margin (GRM) between $4 and $5 per barrel and its gross integrated margin (GIM) between $7 and $8 per barrel.