Sat, December 04, 2021

business

PTTEP reports big jump in Q3 net profit as sales and price improve


PTT Exploration and Production Pcl (PTTEP) has reported improved operating results for the third quarter of 2020 compared to the previous quarter with net profit of US$230 million (Bt7.2 billion), primarily due to higher sales volume and higher average selling price.

Phongsthorn Thavisin, chief executive officer of PTTEP

Phongsthorn Thavisin, chief executive officer of PTTEP, said that the company generated a total revenue of $1.305 billion (Bt40.887 billion) in the third quarter of 2020, up 19 per cent over the $1.095 billion in the second quarter.

The key factor was improvement in sales volume to 344,317 barrels of oil equivalent per day (BOED), a 5 per cent growth from 327,004 BOED in the previous quarter. This was supported by higher gas nomination from projects located in the Gulf of Thailand, especially the Bongkot project and the Contract 4 project. Meanwhile, the average selling price in the third quarter adjusted upward by 11 per cent to $38.77 per barrel of oil equivalent (BOE) in comparison with $34.97 per BOE of the second quarter as the global crude oil price rose.

PTTEP reported net profit of $230 million in the third quarter, an increment of 72 per cent from $134 million in the previous quarter. The company managed to maintain the unit cost at $30 per BOE with earnings before interest, taxes, depreciation and amortisation margin at 71 per cent, aligned with the company’s target.

For the first nine months of 2020, PTTEP earned a total revenue of $4.082 billion, down 11 per cent from $4.572 billion year on year.

Net profit was booked at $639 million, a decrease of 46 per cent from $1.185 billion, caused by low average selling price in line with global crude oil price.

Phongsthorn said: “The performance of the third quarter was better than the previous one. This was a result of rising demand for energy after several countries started to relax the enforcement of city lockdown measures to curb Covid-19 pandemic. Meanwhile, members of the Organisation of the Petroleum Exporting Countries Plus still adhere to its policy on petroleum production cut. Spot LNG price in late September climbed above $5 per MMBTU, encouraging lower LNG import while we witnessed higher gas nomination from projects in the Gulf of Thailand. This is expected to potentially increase the sales volume in the last quarter of this year. However, PTTEP shall stay abreast of the situation in order to get prepared in terms of both proactive and reactive plans in correspondence to situations.”

PTTEP reports big jump in Q3 net profit as sales and price improve

Phongsthorn added that during the third quarter, PTTEP started drilling an appraisal well to assess the petroleum potential of Block Sarawak SK410B in Malaysia. Exploration activities last year found PTTEP’s largest commercial discovery of natural gas, which was also recorded as the world's seventh largest petroleum discovery in 2019. The result of the appraisal campaign will be obtained this year prior to making a final investment decision in 2022. In addition, PTTEP said it had acquired additional participating interests of 24.5 per cent in the Algeria Hassi Bir Rekaiz project from CNOOC Limited, one of the joint venture partners. The investment value will be evaluated from CNOOC’s total spending during the development phase until the approval from the Algerian government, which is now in process. Once the transaction is completed, the company will have a total share of 49 per cent. First oil production is expected to come on stream in 2021 with the start-up volume of 10,000-13,000 barrels per day (BPD), and will be ramped up to 50,000-60,000 BPD in 2025 as targeted.

Regarding progress of Block G1/61 (Erawan) and Block G2/61 (Bongkot) operational transitions, PTTEP said it planned drilling activities, construction of wellhead platforms, interfield pipelines, and relevant preparations to ensure gas production in pursuance of the Production Sharing Contract. Regarding Block G1/61, PTTEP said it remains in negotiations with the existing operator for site access so as to install production platforms and submarine pipelines as planned.

PTTEP estimates average sales volume this year at 350,000 BOED, slightly lower from what has been targeted in the middle of the year.

Published : October 30, 2020

By : The Nation