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Thailand: PTT eyes partnership with national oil firms

2012/12/11

PTT is ready to team up with national oil firms in Asean to expand its presence in the region, according to its chief executive officer Pailin Chuchottaworn.

He added that the company is ready to partner with them, especially Malaysia’s Petronas and Indonesia’s Pertamina, in expanding upstream petroleum exploration and production, refining and petrochemical operations, amount of which require massive investment.

The partnership plan is among of its risk-diversification strategy.

The company is studying the possibility of expanding its petrochemical business in Malaysia, Indonesia, Vietnam and Myanmar, Pailin said.

PTT’s image is well recognised by energy conglomerates in Asean, he said. While PTT and Petronas are both competitors and partners, they will collaborate extra in the next after the inception of the Asean Economic Community in 2015.

“Our investment in Asean will be focused on partnering with national energy firms in Asean,” he said. “In Myanmar, the government puts a lot of trust in us as our drill surveys often find petroleum sources. Accordingly, it has granted us concessions to invest in a lot of fields.

“Like the insurance business, companies in the petroleum business don’t like to assume risks alone because of the high costs. The cost of drilling each oilfield ranges from $10 million to $100 million [Bt307 million to Bt3.07 billion]. If you drill and find nothing, it’s a waste of money. Accordingly, we should join with the other national energy firms or strong energy firms in Asean in doing business.

“PTT does not want to prosper alone in the region and as well wants to diversify risk as much as it can.”

PERTAMINA TALKS

PTT is as well in talks on a possible partnership with Pertamina on a joint investment in a refinery and petrochemical complex. Pailin said the attempts by the US and China to exert a bigger role in Asean would not affect PTT’s business as the firm is ready to be a partner with both in projects that will benefit not only the company, but as well Thailand’s national energy security.

From a geopolitical perspective, Asean has abundant natural resources and China is one of its biggest markets.

Prasert Bunsumpun, board chair of PTT World Chemical (PTTGC), said the firm aimed to achieve double increase in the next 10 years through its expansion of refinery and petrochemical businesses overseas, especially in Asean.

He added that the expansion into Asean would reduce business risk in the long run after the decline of natural gas supplies in the Gulf of Thailand. He said Malaysia may be the first country in whose refinery and petrochemical business PTTGC would invest, followed by Indonesia.

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