Published on April 26, 2011
PTT Exploration and Production (PTTEP) is exploring business opportunities in South America and Africa, with a view to turning the areas into the company's third business pillar, following Thailand plus Burma and Australia plus Canada.The company's success in collaborating with Norway's national oil company Statoil in the Kai Kos Dehseh (KKD) oil sands project in Canada late last year is the inspiration behind further expansion of oil and gas exploration and production overseas, said president and CEO Anon Sirisaengtaksin.
"Since we acquired a 40-per-cent stake in KKD for US$2.28 billion [Bt68.2 billion], many big energy players in the world have been looking at PTTEP. They were surprised at our having joined a big project like KKD, as they didn't think a small player like us would do such a big deal. Now, PTTEP is attracting the interest of those giant firms and some want to do business with us," he said.
Anon said PTTEP's existing operations were now very strong and stable. Its first business pillar is oil and gas exploration and production in the Gulf of Thailand and Burma.
This pillar comprises many fields, such as Thailand's Sirikit, Bongkot and Arthit and Burma's Yadana and Yetagun, for which PTTEP has to maintain production and revenue, as well as seeking new blocks for oil and gas production.
The company is also thinking about how to utilise new technology to increase capacity from the existing blocks, he said.
PTTEP is making its presence felt in the second pillar, which covers Australia and Canada. Production at the Montara field off Australia is expected to resume by the end of this year, while Canada commenced production early in the year.
The company is looking to invest in other Canadian exploration and production projects with Statoil, with the two businesses having just inked an agreement to cooperate in this area.
"PTTEP has set a target to have a |production capacity of 900,000 barrels |of oil equivalent per day [boe/d] by 2020. The production sites we have right now |will produce half of our target by that |year. Therefore, we have to look for new projects to help us accomplish the goal," said Anon.
He added that once PTTEP achieved its target, it should step up to become one of the top five oil and gas exploration and production companies in Asia, behind enterprises in China, Malaysia, Japan and South Korea. It is currently in the top 10.
The company presently aims to produce and sell nearly 300,000boe/d of oil and gas, while the KKD project is expected to have a capacity of 150,000boe/d by 2020. KKD is scheduled to produce 8,000boe/d by the end of this year, rising to 80,000-100,000 within the next five years.
The company president said PTTEP had divided its projects into three groups: those that are already generating revenue; those that are going to generate revenue; and projects in which it has to invest for the exploration stage.
KKD and Montara are projects that are going to make money and in which the company has to invest more in order to drive output.
The new projects PTTEP is seeking may be greenfield sites or existing projects. The latter type of deal is more likely to be concluded, as the company needs projects that can generate revenue immediately, Anon said.
"We're looking for many deals in South American countries such as Brazil, and some in Africa. These are unfamiliar areas for PTTEP, so we have to consider everything carefully. We need partners if we want to grow in these regions, compete with existing players and learn new things in which we are not experts," he said.
Anon said he would not commit to concluding any new deals this year, saying that it depended on the opportunities presented.
PTTEP is currently exploring about 20 projects in the Middle East and Canada. The company will consider all the risks and opportunities carefully before making a decision on any of these, he added.