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PTTEP cuts 2017 budget

By  Wednesday, 11 January 2017 21:49
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Thai oil company PTT Exploration and Production (PTTEP) has reduced its annual budget by 30% to US$2.9 billion and is focusing on maintaining production levels to meet domestic energy demand.

From the $2.9 billion, about $1.64 billion will be allocated for capital expenditure (capex) and the remaining $1.26 billion will be used for operating expenditure.

Investments in the company’s strategic investment locations in Thailand and Southeast Asia will make up for 88% of the planned capex.

Projects in Thailand account for 64% of PTTEP’s estimated capex in 2017. Key activity is to maintain the production levels of the existing projects, which primarily include the Arthit, S1, Bongkot, Contract 4 and MTJDA projects.

Planned activities in Southeast Asia are mainly in producing Myanmar assets. Comprising 24% of the capex, it includes maintaining production levels of the Zawtika and Yadana projects, as well as exploration activities in the Myanmar MOGE 3 and Myanmar M11 projects.

In addition, some 12% of the capex will go towards developments in Australia, Africa, and North and South America. This involves the PTTEP Australasia project and the pre-development of Mozambique Rovuma Offshore Area 1.

PTTEP has also set its investment budget for the next five years (2017-2021) totaling $14.950 billion. Capex includes pre-development projects, namely the Contract 4, Mozambique Rovuma Offshore Area 1 and Algeria Hassi Bir Rekaiz projects.

“This investment plan reflects the group’s strategic directions of 3Rs – Reset, Refocus, Renew – with priority on maintaining the production level to effectively serve domestic energy demand, as well as accelerating the development of existing projects in the pipeline,” said PTTEP president and CEO Somporn Vongvuthipornchai.

“Besides, the company has closely monitored the oil price situation, with the flexibility to adjust our investment plan appropriately and strived to uphold the cost optimization and efficiency improvement initiatives through the ‘Spend Smart to Business Sustainability’ campaign.”

He added that the group’s financial position remains robust with cash on hand of more than US$3 billion, ready to cope with the fluctuation in global crude prices as well as to seek new opportunities in mergers and acquisitions order to strengthen petroleum reserves and production volumes in the longer term.

Last August, PTTEP sold its Oman subsidiary, PTTEP Oman (PTTEP OM) to ARA Petroleum LLC. PTTEP OM holds 100% interest in the Oman 44 project, a natural gas and condensate field located onshore to the west of Muscat with the acreage of 1162sq km.

The project has been on commercial production since 2007, with an average output of 19 Mcf/d of natural gas and 904 bbl/d of condensate in Q2 2016.

Image: Somporn Vongvuthipornchai / PTTEP

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