PTTEP defers Canadian oil sands project
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PTT EXPLORATION and Production has decided to postpone its oil sands project in Canada, as part of its review of unnecessary projects and expenses amid the softening global oil prices. "The company will still look at the investment plan but we will have
The Canadian oil sands project, for which PTTEP paid Norway’s Statoil US$2.3 billion (Bt75.7 billion) to acquire a 40-per-cent stake in 2011, would be delayed after it revised its capital expenditure plan for next year, he said.
PTTEP still has sufficient cashflow for mergers and acquisitions, especially in the Asean region, which is its main focus, and for investing to generate production at the same rate as this year, and for paying dividend.
The company can count on $4 billion in cashflow and can borrow $2 billion-$3 billion, while its debt-to-equity ratio is only 0.3 times.
The company is maintaining its target to increase petroleum sales volume by 8 per cent this year, in expectation of an increase in orders this quarter, due to seasonal factors.
It set the growth target for next year at 10 per cent on additional production from Myanmar and Algeria.
PTTEP’s earnings before interest, tax, depreciation and amortisation margin for next year might shrink due to the drop in Dubai crude to $85 a barrel at present. It estimates its average price at $60 a barrel next year, down from $66 this year.
An analyst from Trinity Securities said PTTEP’s results are likely to stay flat this quarter from the previous quarter, since gas prices have begun to decline in line with the world’s oil prices.
Gas prices are expected to slip 3 per cent from the previous quarter. However, the impact will be offset by increased production from a new Myanmar gas field. It is also expected to reap at least a Bt2 billion gain from hedging if crude closes at $85 or lower at the year-end.
