PTT Launches Major Restructuring Programme Targeting 110,000 Million Baht Cash Generation
PTT Unveils Comprehensive Restructuring Strategy to Navigate Economic Headwinds Energy giant targets 10,000 million baht in cost savings whilst accelerating EV charging network expansion and Eastern CCS Hub development
- PTT's restructuring program aims to generate over 110,000 million baht in cash flow, targeting 38,000 million baht in 2025 and 77,000 million baht in 2026.
- The strategy involves strengthening core hydrocarbon operations while diversifying into clean energy technologies like Carbon Capture and Storage (CCS) and hydrogen.
- A key part of the plan is cost reduction and operational excellence initiatives, which are expected to improve EBITDA by over 10,000 million baht this year.
- The company will also restructure its non-hydrocarbon portfolio and seek strategic partners for its petroleum and refinery businesses to optimize assets and add value.
Thailand's energy conglomerate PTT has outlined an ambitious restructuring programme designed to bolster its financial resilience whilst positioning the company for sustainable growth amid challenging economic conditions.
Speaking at a media briefing on Wednesday, Kongkrapan Intarajang, PTT's chief executive and president, detailed the company's comprehensive strategy centred on strengthening core hydrocarbon operations whilst diversifying into clean energy technologies and strategic partnerships.
The restructuring aims to generate EBITDA improvements of over 10,000 million baht this year through cost reduction initiatives, with PTT targeting cash flows of 38,000 million baht in 2025 and 77,000 million baht in 2026—totalling more than 110,000 million baht over the two-year period.
"With our vision of 'PTT Strong Together with Thai Society and Growing Globally with Sustainability', we recognise the necessity to restructure our internal organisation to strengthen PTT from within," said Kongkrapan. "We must enhance capabilities in businesses where we excel, whilst seeking partners to support areas where we lack expertise."
Strategic Initiatives Drive Transformation
The energy giant's transformation strategy encompasses three key timeframes, beginning with immediate non-hydrocarbon business restructuring through three core initiatives:
P1 & D1 Supply Chain Optimisation targets revenue increases of 5,800 million baht annually by 2030, with this year's goal set at 4,325 million baht.
MissionX Operational Excellence aims to boost revenues by 30,000 million baht per year by 2027, with a current target of 10,000 million baht for this year.
AXIS Digital Transformation seeks to generate 12,000 million baht annually by 2029, starting with 200 million baht this year.
Hydrocarbon Business Expansion
In its core hydrocarbon operations, PTT continues to strengthen its position through strategic expansions.
Subsidiary PTTEP has extended exploration and production activities across new fields including Arthit, Sinphuhom, and MTJDA sources, whilst securing the Reggane II project bid.
The company is positioning itself as a global LNG player, targeting expansion of its LNG portfolio to 10 million tonnes per year by 2030 and 15 million tonnes by 2035.
PTT has signed a memorandum of understanding for long-term LNG supply studies with 8 Star Alaska LLC in the United States.
Clean Energy and Sustainability Focus
PTT's sustainability drive follows a balanced three-dimensional approach encompassing energy security, affordability, and environmental responsibility.
The company has completed feasibility studies for the Eastern Thailand CCS Hub, with a final investment decision made for the CCS project at the Arthit field.
The CCS initiative targets 1 million tonnes capacity by 2028, expanding to over 5 million tonnes by 2034 as part of the Eastern Thailand CCS Hub development.
In hydrogen business development, PTT is exploring opportunities for low-carbon ammonia procurement as co-fuel for power plants.
The company has signed a cooperation agreement to study the technical and commercial feasibility of importing green hydrogen and green ammonia produced in India through partnership with Avaada Ventures Private Limited.
Non-Hydrocarbon Portfolio Restructuring
The company is implementing significant changes across its non-hydrocarbon businesses. In life sciences, PTT is collaborating with expert partners to create self-funding growth whilst adjusting its Lotus shareholding structure through share sales to increase operational flexibility.
The electric vehicle business has undergone restructuring with PTT divesting its investment in Neo Mobility Asia Limited, aligning with predetermined strategic plans.
Meanwhile, the company is accelerating EV charging infrastructure development, targeting synergies with subsidiary OR to expand the network.
Partnership Strategy and Asset Optimisation
PTT's medium-term strategy involves reshaping its petroleum and refinery (P&R) portfolio by strengthening flagship companies whilst opening opportunities for strategic partners to add value.
The company emphasises that potential partners must be industry players, with PTT maintaining its position as majority shareholder and considering these businesses as group flagships.
The partnership selection process is expected to conclude by 2025, with business implementation targeted for completion by 2026.
Through its asset monetisation strategy, PTT aims to maximise asset efficiency whilst generating sustainable long-term returns.
The first half of 2025 has already delivered 3,814 million baht in operational cost savings, supporting the full-year target of 10,000 million baht.
Navigating Geopolitical Uncertainties
Addressing external challenges, Intarajang acknowledged the company's close monitoring of geopolitical developments, including potential impacts from US trade policies and Thai-Cambodian border disputes.
"The global environment presents uncertainties across multiple dimensions, including geopolitics. PTT Group must manage and plan investments carefully whilst maintaining good returns," he stated. "US taxation represents another risk factor, and we must prepare contingency plans through war room operations."
Regarding the Thai-Cambodia border situation, PTT emphasises its role as a national energy company prioritising domestic security interests, with subsidiary OR managing related risks and decision-making processes.
Future Outlook
PTT expresses confidence in its strategic direction, establishing war room scenario planning capabilities to ensure flexibility and rapid adaptation to changing circumstances.
The company identifies five key areas requiring continuous monitoring: geopolitical conflicts, technological advancement, regulatory changes, energy transition, and industry landscape evolution.
Looking ahead, PTT anticipates stable oil price trends without significant increases, suggesting petrochemical and refinery margins will remain steady.
The company believes its operational capabilities and EBITDA enhancement initiatives will achieve targeted objectives despite challenging market conditions.
The comprehensive restructuring programme represents PTT's commitment to maintaining its position as Thailand's energy security anchor whilst evolving into a sustainable, globally competitive energy conglomerate.
