PTTEP eyes more shares in Rovuma

“The company plans to expand its business exponentially. Our strategic aim is to increase petroleum production to 900,000 barrels a day by 2020 to meet the continually rising demand for energy,” said Tevin Vongvanich, chief executive officer of PTTEP.
In May, PTTEP made a tender offer to buy the entire paid-up and non-paid-up shares of UK-based Cove Energy at 240 pence (Bt118) each. Cove Energy holds an 8.5-per-cent stake in the Rovuma project, a major undersea gas resource 60 kilometres off Mozambique. According to a report by Anadarko Petroleum Corporation, the operator of the project, there are 66 trillion cubic feet of probable reserves.
Tevin said Shell Corp’s announcement that it was sticking with its bid price of 220 pence per share and dropping out of the bid made PTTEP’s offer of 240 pence the highest to date.
“The company will have to wait until July 25 at 1pm GMT for the result of its tender offer. However, PTTEP expects to wait until July 31 on whether it can win the bid,” he said.
The Rovuma project would fit in with PTTEP’s current strategy of investing in liquefied natural gas, which is in high demand. “We are certain that the company will be able to produce LNG by 2019 provided that everything goes as planned,” he said.
PTTEP’s bid is a giant leap for the company to gain access to the energy sources in East Africa, which have high prospects because of their hydrocarbon-rich nature.
“We are excited to become part of the Rovuma project as we hope that the knowledge gained from operating in 1,000-metre-deep underwater reser-ves would help us develop the same type of reserves in Myanmar. Anadarko Petroleum Corp, similarly, is interested in investing in Myanmar,” he said.
Currently 36.5 per cent of the Rovuma project is owned by Anadarko Petroleum, 20 per cent by the Mitsui & Co, 15 per cent by the Mozambican government, 10 per cent by Bharat Petroleum and 8.5 per cent by Cove Energy.
Tevin said that if PTTEP succeeds in the takeover of Cove Energy, it would buy more shares in Rovuma from other shareholders. In addition, the company is looking to further its investment in other areas in the region. Cove Energy also holds a 10-per-cent stake in a Mozambican land concession and stakes in seven blocks in Kenya, all of which are in the sea – holding 10 per cent interest in five blocks, 15 per cent in one and 25 per cent in the seventh.
He said PTTEP had reserved cash and prepared for loans totalling 950 million pounds  (Bt46.8 billion) for the purchase. Last Friday, the company’s board gave approval to increase its capital and agreed to sell common shares to public, with the number not exceeding 650 million. Proceeds would be Bt98 billion.
In the first half, the firm posted consolidated revenue of US$3.26 billion (Bt104 billion), up 17 per cent from the same period last year. Net profit was up 15 per cent to $839 million. However, sales in the first six months were 258,426 barrels equivalent to crude oil a day, down from 272,307 barrels a day in the same period last year.