PTT Plans $100B Spending Spree

BANGKOK (Dow Jones Newswires), July 7, 2010

PTT Wednesday revealed plans for a decade-long $100 billion spending spree to become a Fortune 100 company with annual revenue between $140 billion and $150 billion.

Thailand's biggest energy conglomerate by revenue plans to split its spending on new investments between the Thai market and overseas, PTT Chief Executive Prasert Bunsumpun told reporters at an energy conference.

Prasert said the offshore expansion will most likely include petroleum exploration, growing its liquefied natural gas businesses and making acquisitions.

Last year PTT said it had a five-year expansion plan, starting in 2010, to make an average investment of THB200 billion ($6.17 billion) a year.

Earlier this week, PTT's wholly-owned subsidiary, PTT International, said it plans to acquire up to three coal mines in Indonesia or Australia this year, while PTT Exploration & Production--the company's flagship petroleum exploration unit--has been expanding through the Asia-Pacific region and into the Middle East, with operations in Australia, Indonesia, Oman, Myanmar and Vietnam.

Prasert said PTT's expansion strategy will result in PTT's offshore businesses accounting for at least 20% of total revenue over the next five years. Without specifying a timeframe, Prasert said overseas businesses will eventually account for 50% of revenue.

He forecast PTT's 2010 revenue will reach THB2 trillion, up from THB1.62 trillion last year.

In the first quarter of this year, PTT reported revenue of THB461.09 billion and net profit of THB23.02 billion.

PTT is Thailand's sole natural gas transmission pipeline operator and it is the country's largest retail oil operator by market share. It has diversified into petroleum exploration, oil refining, coal mining and power plants through its subsidiaries and affiliates.

Meanwhile, Prasert said an increase in official interest rates later this year would not affect PTT as most of its debts had fixed interest rates.

In the first half this year, PTT group companies raised nearly THB200 billion and PTT did not intend to borrow any more, he said.

Moody's Investors Service late last month downgraded the ratings of PTT and its PTT Exploration & Production subsidiary because of the companies' heavily debt-financed investment plans over the next three years.

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