THAILAND’S energy conglomerate PTT Public Co. Ltd (PTT PCL), the parent firm of PTT Philippines Corp., will pursue an acquisition-growth strategy this year backed by its ample cash and a stronger capital budget, a BMI Research study said.
“A gradual recovery in global oil prices looks set to extend further support to earnings. In addition, accelerating IOC [international oil companies]divestment of Asian oil and gas assets will provide ample opportunities for PTT to deploy its sizeable cash balance (USD4.5bn at end-2017),” Fitch-owned BMI Research said.
PTT will “deploy its ample cash and stronger capital budget to pursue its acquisition-based growth strategy over the coming quarters,” the study said.
BMI has maintained an upbeat outlook for PTT’s upstream business over the succeeding quarters.
To pursue this growth strategy, the research firm said PTT intends to increase its capital budget for this year, with capital expenditures (capex) for upstream set at $1.4 billion, up by 33 percent from the previous year.
BMI also noted the chunk of PTT’s upstream capex will be allocated to its projects in Thailand and Myanmar.
Asset divestments and expiring production licenses across Asia Pacific, specifically Vietnam and Malaysia, could pique the interest of PTT, with priority likely to be given to natural gas undertakings, BMI said.
In the Philippines, PTT Philippines Trading Corp. General Manager Danilo Alabado told reporters they plan to expand their jet fuel supply business outside the Philippines.
“We’re also going to compete in airports outside the country, in areas where Cebu Pacific has presence, mostly in Asia plus two in Australia,” Alabado said during the unveiling of PTT’s gasoline station in Concepcion, Tarlac last February 13.
PTT Philippines and Cebu Pacific recently renewed their jet fuel supply agreement amounting to P7 billion for this year.
At the same event, PTT Philippines Marketing Director Thitiroj Rergsumran also said they will open about 30 Jiffy stores and 10 Café Amazon stores in the country. Jiffy is a chain of convenience stores while Café Amazon is touted to be the most popular coffee chain in Thailand.
“On the 16th [of February], I will go back to Thailand to conclude the plan to expand Jiffy in the Philippines,” Rergsumra said at the time.