Press Release

PTT Exploration and Production Public Company Limited (PTTEP) plans USD 2,090 million for capital expenditure (CAPEX) and USD 1,353 million for operating expenditure (OPEX); while still targets to maintain stable sales volume in 2016.  This demonstrates the Company’s continuous effort in cost reduction in response to current situation in global oil prices with 2016 budget decreasing from estimated 2015 CAPEX and OPEX spending, a level which already came down by 25% from 2015 budget set out at the beginning of the year.  

PTTEP President and CEO Somporn Vongvuthipornchai disclosed that the company plans to spend USD 3,443 million in 2016, decreasing continuously from the estimated CAPEX and OPEX spending this year.  The budget was prepared in consideration of the challengingly low oil price environment expected in the year to come and comprises USD 2,090 million CAPEX and USD 1,353 million OPEX. The company expects average sales volume at 333,000 barrels which is not less than that in 2015.

Details of 2016 investment plan by region are as the followings; 

• Projects in Thailand account for 55% of next year’s estimated CAPEX. Key activity is to maintain the production level of the existing projects. The highlight assets in this group are the Arthit project, the S1 project, the Bongkot project, the Contract 4 project and the MTJDA project.
• Projects in Southeast Asia account for 27% of estimated CAPEX next year. Major activities in this region are mainly from Myanmar assets which include maintaining production level of the Zawtika project, the Yadana project and the Yetagun project as well as evaluating development options for the Myanmar M3 project.
• Projects in other regions which comprise Australia, North and South America, Africa and the Middle East, account for 18% of PTTEP’s estimated CAPEX in 2016. Major activities are development activities in the Mozambique Rovuma Offshore Area 1 Project and exploration activities in the Brazil BM-ES-23 Project.

PTTEP targets a slight increase in next year’s average sales volume at 333,000 BOED in comparison with 331,000 BOED expected to be achieved in 2015, driven by full-year recognition of sales volume from the Bir Seba field, Algeria 433a and 416b project which commenced the production in the final quarter of this year with about 20,000 barrels per day (BPD) of production capacity. 

Apart from the investment plan, PTTEP emphasizes on maintaining ample liquidity in a highly volatile oil price, money and capital markets. This provides a good opportunity for the company to engage in potential merger and acquisitions (M&A), especially in high potential shallow-water and conventional projects located in PTTEP’s growth platform, which includes Thailand and other Southeast Asia countries.

PTTEP is also progressing on the cost reduction front through the SAVE to be SAFE program.  Initiated in 2014, the program introduced a number of cost optimization initiatives in response to the crude oil price downturn.  As a result, PTTEP successfully achieved a 25% total expenditure reduction compared to its original investment plan in 2015. 

The 5-year investment plan over the 2016-2020 period comprises CAPEX of USD 11,100 million and OPEX of USD 6,700 million as shown in the table below;

Unit: USD Million

“We conducted financial projections and investment plans at various oil price scenarios such that we can flexibly adjust our expenditure plan to conform to the volatile oil prices. At the same time, we intend to strike a fine balance in both business growth and financial performance to achieve long-term sustainability,” added Mr. Somporn.