Corporate strategy (Execute and Expand)
PTTEP follows through its 'Execute & Expand' strategy in enhancing the Company's competitiveness, promoting sustainable growth and preparing for future challenges within the energy industry.
Create added value from existing assets with an emphasis on the production volume of key assets while also accelerate the development of major overseas projects to ensure timely production start-ups.
Emphasize investment in Thailand, Southeast Asia and the Middle East. (Coming-home).
Continually maintain production cost at a competitive level through digital technology and enhanced operational efficiency.
Seek integrated opportunities in liquefied natural gas business.
Efficiently operate Bongkot, Erawan and new fields acquired in the transitional period.
Explore investment opportunities in other potential areas together with experienced partners. (Strategic Alliance).
Diversify portfolio throughout our value chain in the oil and gas business, including investments in the natural gas value chain, such as the Gas-to-Power project in the Republic of the Union of Myanmar and in new business sectors, including robotics and Artificial Intelligence (AI) and renewable energy.
Progress of business strategies
- Strengthen PTTEP's main business and create added value from existing assets for greater competitiveness. This includes the postponement of non-critical activities, adjustment of asset development accordingly to post COVID-19 pandemic supply forecasts, and assessment of new technologies to improve work efficiency and reduce operating costs.
- Signed a project finance contract to fund the development of Mozambique Area 1 for the first two LNG production lines, following the announcement of final investment decision in 2019 to support LNG production.
- Completed the transfer of operational right of Bongkot, Erawan and recently acquired fields as planned. Emphasis was placed on collaboration with all co-beneficiaries to ascertain production continuity.
- Commenced drilling the appraisal well at Sarawak SK410B, Malaysia, shortly after reporting one of PTTEP's historically largest natural gas discoveries.
- Signed the asset sale and purchase agreement to acquire additional participating interest of 24.5% in Algeria Hassi Bir Rekaiz project from CNOOC, one of the project's partners. The value was based on CNOOC's total spending during the development phase until project approval date. The project development is pending for the Algerian government's official approval. Once completed, PTTEP's participating interest will increase to 49% (while the remaining 51% is owned by Sonatrach, Algeria's national state-owned oil company). Production is expected to start in the latter half of 2021 with initial volume of 10,000 - 13,000 barrels per day (BPD) and will be ramped up to 50,000 – 60,000 BPD in 2025.
- Won the bid for Block Offshore 3, off the coast of the United Arab, a region with low operating costs, in a joint bid with Eni.
- Signed Exploration and Production Sharing Agreement (EPSA) with Oman's Ministry of Oil and Gas (MOG) for exploration and production rights of Oman Onshore Block12, a 10,000 square kilometer onshore natural gas field in the middle of Oman, in collaboration with Total which has extensive experience in the Sultanate of Oman. The large onshore block is situated in the middle of Oman, being the country's primary area for natural gas exploration, development and production.
- Made two successful deep-water oil discoveries in Mexico's offshore Block 29 with good quality reservoirs. Discussions with co-operators on resources evaluation and development are underway, before seeking an approval from Mexico's regulatory body.
- Expanded AI and Robotics Ventures Co., Ltd. (ARV) under PTTEP's strategy to invest in new businesses. Two new joint venture companies were set up.
- ATI Technologies Co., Ltd. for smart farming business, providing integrated agricultural services on a digital platform whereby smart farming technology is utilized in analyzing in-depth data for Thailand's greater agricultural capacity. In collaboration with Thaicom Public Co. Ltd. (THCOM), products and services related to agricultural drones are being developed.
- Zeaquest Co. Ltd. for subsea inspection, repair & maintenance (IRM) business, emphasizing robotics and artificial intelligence including robots for the inspection and maintenance of underwater petroleum pipelines. Mermaid Maritime Public Co. Ltd. provided engineering services.
- Return on capital employed (ROCE) was at 5.37% as expected, higher than the 2019 industry average.
- Unit cost was at USD 30.50 per barrel of oil equivalent (BOE), being at a competitive level against other players in Asia's petroleum E&P industry.
- Production growth rate at 2% as a consequence of the COVID-19 outbreak and low oil price.
- Proved reserves-to-production ratio (R/P Ratio or 1P/Production) stayed at 7 years, on par with the minimum 7-year goal by 2025.
- Natural gas production accounted for 70% of total production volume in 2020, under the goal to ramp up gas production to at least 80%.
On top of these, PTTEP gave importance to the disclosure of financial performance, sustainability-related performance and other significant information, to equip shareholders and investors with sufficient information in an accurate, speedy, timely and equitable manner. The Investor Relations is responsible for the disclosure. Click here to access the information.