Thailand's first wood-fired power plant is expected to start operations early next year as part of the government's policy to promote alternative energy sources, said the Energy Policy and Planning Office.
A Plus Co, wholly owned by the Thammarak Niwet Foundation, will operate the 1.5-megawatt station, said EPPO secretary-general Viraphol Jirapraditkul.
The wood-fired plant is a pilot project supported by the EPPO and Suranaree University of Technology (SUT).
There are a number of suitable fastgrowing trees that act as carbon sinks while being farmed that can be used as clean energy sources once harvested.
There are three fast-growing tree varieties - acacia, acacia mangium and leucaena - that are commercially viable for use in Thailand, a SUT study found.
A Plus established a 1,000-rai leucaena plantation to supply its plant with fuel.The firms plans to increase the plot size by another 2,000 rai next year.
The EPPO and the Energy Ministry supported the project yesterday by providing it with one million leucaena trees for the plantation.
Leucaena is a fast-growing nitrogenfixing tree with many uses that grows well in tropical conditions. It removes nitrogen gas from the air and make its usable for plants and animals.
A Plus's power plant will be Asia's second wood-fired power plant, following the launch of a similar project in India.
The cost of producing power at the wood-fired plant is 1.60 baht per kilowatt hour (unit), slightly higher than 1.25 baht per unit at a coal-fired plant.
Thai energy policymakers hope the fuel-wood plantations would help reduce both greenhouse gases and coal-fired power production, as well as slowing the pace of deforestation.
"As the government is promoting biomass and biogas, we might succeed in reducing the use of mainstream fuel,but we deforestation has increased as farmers tend to cut down forests to plant trees that can be used as fuel," said Mr Viraphol.
The EPPO offers an adder rate of 30-50 satang per unit on top of the unit cost of producing power from renewable fuels,which allows power producers to sell such energy to the Electricity Generating Authority of Thailand at a higher rate.
However, the EPPO is considering further increasing the adder rate for fast growing fuel-woods to encourage investment in wood-fired power, said Mr Viraphol.
"The wood-fired power project not only reduces deforestation but it will not reduce the area used for food crops,"said Energy Minister Wannarat Channukul. Using fast-growing trees for fuel will help Thailand achieve its target for renewable energy to account for 20% of local power production by 2023.
Policymakers are pushing for the use of fuel-wood due to a severe shortage in other biomass resources, such as rice husks, corn waste and chipped rubber wood, said Weerachai Arjharn, chairman of SUT's Center of Excellence in Biomass.
The Natural Resources and Environment Ministry plans to plant fuel-wood in deforested areas. It plans to increase the current 37,000 rai of fuel-wood plantations to 50,000 rai in the near future, he said.
"If we turn deforested areas into fuelwood plantations, we could have 300MW of wood-fired power capacity," he said.
TPI Polene and Mitr Phol Group have also announced plans to start growing leucaena trees near their production plants so they can use the fuel-wood for future power production.
Wednesday, October 28, 2009
Magnificent seven
In the most important, most revered event since the invention of the brontosaurus trap,Microsoft shipped the most incredibly fabulous operating system ever made; the release of Windows 7 also spurred a new generation of personal computers of all sizes at prices well below last month's offers.The top reason Windows 7 does not suck: There is no registered website called Windows7Sucks.com
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
GREAT AGRO HAS HIGH HOPES FOR STEAMLESS PALM-OIL EXTRACTOR
Great Agro launches steamless palm-oil extraction to serve the government's policy of boosting alternative-energy production, Great Agro has launched the Steamless Palm Oil Extracting System, targeting small-scale oil-palm growers in regions outside the South who produce palm oil for use in biodiesel.
The system is design as a prototype for use in sustainable development, and uses technology that has been applied in Malaysia and Indonesia.
The 'steamless' system is targeted at small-scale growers with plantation areas of between 1,000 and 3,000 rai. Having extracting machines at their plants will allow growers to achieve high-quality palm oil and reduce transportation costs, Great Agro claims.
Nared Chininmanu, deputy managing director, said the system also provided consumers with high biodiesel quality at lower cost.
"We want oil-palm growers in other regions under the government's promotional area to have their own crunching systems at their plantations.
"So far, only big palm-oil producers in the South have set up extracting machines," he said.
Extraction is an important upstream process in the palm-oil production and processing chain, playing a key role in increasing the value of oil-palm products.
Using steam in the palm-oil production process causes decreased quality of crude palm oil and has a negative environmental impact due to the wastewater released.
The government has promoted the utilisation of biofuel in industrial sectors, in particular transportation, and demand for palm oil in biodiesel production is increasing.
The extraction system was developed jointly by the company and the National Metal and Materials Technology Centre.
The initial focus will be on the domestic market, and exports are planned once patent registration is approved.
Targeted export markets include Malaysia and Indonesia.
Nared said farmers would enjoy a higher yield of palm oil as the company's technology has generated 22 per cent of oil yield, compared with 17 per cent from steam machines.
Last week, the company launched the technology with a target to sell 10 systems this year at Bt4.5 million each.
Under the government's plan to promote biodiesel consumption, between 300,000 and 400,000 rai of oil palm have been planted since 2006.
The government targets 6 million rai of oil-palm plantations nationwide by 2010.
The system is design as a prototype for use in sustainable development, and uses technology that has been applied in Malaysia and Indonesia.
The 'steamless' system is targeted at small-scale growers with plantation areas of between 1,000 and 3,000 rai. Having extracting machines at their plants will allow growers to achieve high-quality palm oil and reduce transportation costs, Great Agro claims.
Nared Chininmanu, deputy managing director, said the system also provided consumers with high biodiesel quality at lower cost.
"We want oil-palm growers in other regions under the government's promotional area to have their own crunching systems at their plantations.
"So far, only big palm-oil producers in the South have set up extracting machines," he said.
Extraction is an important upstream process in the palm-oil production and processing chain, playing a key role in increasing the value of oil-palm products.
Using steam in the palm-oil production process causes decreased quality of crude palm oil and has a negative environmental impact due to the wastewater released.
The government has promoted the utilisation of biofuel in industrial sectors, in particular transportation, and demand for palm oil in biodiesel production is increasing.
The extraction system was developed jointly by the company and the National Metal and Materials Technology Centre.
The initial focus will be on the domestic market, and exports are planned once patent registration is approved.
Targeted export markets include Malaysia and Indonesia.
Nared said farmers would enjoy a higher yield of palm oil as the company's technology has generated 22 per cent of oil yield, compared with 17 per cent from steam machines.
Last week, the company launched the technology with a target to sell 10 systems this year at Bt4.5 million each.
Under the government's plan to promote biodiesel consumption, between 300,000 and 400,000 rai of oil palm have been planted since 2006.
The government targets 6 million rai of oil-palm plantations nationwide by 2010.
Tuesday, October 20, 2009
EXPERT SEES PICK-UP IN OIL AND GAS M&A ACTIVITY
The number of mergers and acquisitions in the globฌal oil and gas industry slumped to 393 in the first eight months of the year from 697 in the first nine months of 2008, in the aftermath of the worldwide financial meltdown.
However, the value of M&As only fell from US$99.11 billion (Bt3.3 trillion) to $82.98 billion in the same periods, Andy Brogan, an oil and gas specialist at Ernst & Young, said in an exclusive interview with The Nation.
The upstream oil and gas industry was still the most active sector for the eightmonth period, with 355 deals worth $75.38 billion. Downstream deals totalled 38, with a value of $7.6 billion.
In the first nine months of last year, 621 deals worth $89.77 billion were in the upstream sector and 76 deals worth Bt9.33 billion were downstream.
Even though the number and value of M&A deals for the first eight months of this year were lower than the first nine months of last year, the average deal size was greater.
The average size for the upstream and downstream sectors over the first eight months amounted to $212 million and $200 million, respectively, compared with $145 million and $123 million for the first nine months last year.
"After the financial crisis erupted last year, we saw a drop in the volume of transactions … due to a number of reasons. In the second quarter [this year], we could see a pickup in volume. We expected it [M&A] would become more and more active in the last three to four months of this year," Brogan said.
He explained that the global financial turmoil and pricing of assets were among several reasons behind the steep decline in M&A volume this year.
Buyers in the first eight months of this year were diverse, including sovereign funds, national oil comฌpanies and a few international oil companies, he said, adding that the global crisis presented an investment opportunity for wellcapitalised companies.
National oil companies have become more active in the M&A market as targets are more affordable, he added.
Asian national oil companies have jumped on the bandwagon to take advantage of the opportunities, and their recent deals include Sinopec's acquistion of Addex for $7.2 billion, CNPC's acquisitions of MMG for $3.3 billion and Keppel's 45percent stake in the Singapore Petroleum Company for $1.1 billion.
Brogan is optimistic there will be an upturn in numฌber and value of M&A deals in the near future, given the continuous pace of the worldwide economic turnฌaround and the global oilprice rebound.
He expects the oil price to hit a new high in the next five years, while referring to a consensus that it would be $60 a barrel - give or take $10 - over the next six months.
The stronger demand from emerging markets will compensate somewhat for the decline in demand in Organisation for Economic Cooperation and Development countries, he said.
He acknowledged that not all M&A ended up as sucฌcessful, but the upstream sector regularly achieved more of its M&A aims than downstream, as the forฌmer had a clearer target of what it wanted to gain from a merger or acquisition.
"Understanding what you buy and making sure that the price you pay reflects the understanding are the key to success for M&As," he added.
Australia, Indonesia and the Middle East are geoฌlogically favourable areas for investment by Thailand's oil and gas companies, said Vorapoj Amnauypanit, an Ernst & Young (Thailand) partner.
In the past nine months, the Kingdom's inbound oil and gas M&A deals have not been very active, while outbound deals have increased gradually, he said.
However, the value of M&As only fell from US$99.11 billion (Bt3.3 trillion) to $82.98 billion in the same periods, Andy Brogan, an oil and gas specialist at Ernst & Young, said in an exclusive interview with The Nation.
The upstream oil and gas industry was still the most active sector for the eightmonth period, with 355 deals worth $75.38 billion. Downstream deals totalled 38, with a value of $7.6 billion.
In the first nine months of last year, 621 deals worth $89.77 billion were in the upstream sector and 76 deals worth Bt9.33 billion were downstream.
Even though the number and value of M&A deals for the first eight months of this year were lower than the first nine months of last year, the average deal size was greater.
The average size for the upstream and downstream sectors over the first eight months amounted to $212 million and $200 million, respectively, compared with $145 million and $123 million for the first nine months last year.
"After the financial crisis erupted last year, we saw a drop in the volume of transactions … due to a number of reasons. In the second quarter [this year], we could see a pickup in volume. We expected it [M&A] would become more and more active in the last three to four months of this year," Brogan said.
He explained that the global financial turmoil and pricing of assets were among several reasons behind the steep decline in M&A volume this year.
Buyers in the first eight months of this year were diverse, including sovereign funds, national oil comฌpanies and a few international oil companies, he said, adding that the global crisis presented an investment opportunity for wellcapitalised companies.
National oil companies have become more active in the M&A market as targets are more affordable, he added.
Asian national oil companies have jumped on the bandwagon to take advantage of the opportunities, and their recent deals include Sinopec's acquistion of Addex for $7.2 billion, CNPC's acquisitions of MMG for $3.3 billion and Keppel's 45percent stake in the Singapore Petroleum Company for $1.1 billion.
Brogan is optimistic there will be an upturn in numฌber and value of M&A deals in the near future, given the continuous pace of the worldwide economic turnฌaround and the global oilprice rebound.
He expects the oil price to hit a new high in the next five years, while referring to a consensus that it would be $60 a barrel - give or take $10 - over the next six months.
The stronger demand from emerging markets will compensate somewhat for the decline in demand in Organisation for Economic Cooperation and Development countries, he said.
He acknowledged that not all M&A ended up as sucฌcessful, but the upstream sector regularly achieved more of its M&A aims than downstream, as the forฌmer had a clearer target of what it wanted to gain from a merger or acquisition.
"Understanding what you buy and making sure that the price you pay reflects the understanding are the key to success for M&As," he added.
Australia, Indonesia and the Middle East are geoฌlogically favourable areas for investment by Thailand's oil and gas companies, said Vorapoj Amnauypanit, an Ernst & Young (Thailand) partner.
In the past nine months, the Kingdom's inbound oil and gas M&A deals have not been very active, while outbound deals have increased gradually, he said.
Wednesday, October 14, 2009
Oil breaches $75 a barrel for first time in one year
Oil prices jumped above $75 a barrel yesterday in Asia for the first time in a year on investor optimism crude demand will improve ahead of the Christmas shopping season.
Benchmark crude for November delivery was up 73 cents to $74.88 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The price reached $75.15 earlier in the day, the highest since October 2008.
The contract gained 88 cents to settle at $74.15 on Tuesday.
Oil has traded between $65 and $75 since May as traders have mulled mixed crude supply and demand data.
Some analysts expect an increase in diesel fuel demand from US truckers supplying inventor y for the year-end holiday shopping season will tr igger a sustained rise above $75.
" We believe oil prices are poised to move higher," Goldman Sachs, which expects prices to rise to $85 a barrel by the end of the year, said in a report. "All indicators still point to a normal seasonal pick-up in shipping to retailers this year.'
A weak dollar is also bolstering crude prices. The euro rose to $1.4890, the highest since August 2008, in Asian trading from $1.4852 the previous day while the dollar slid to 89.15 yen from 89.69.
Burgeoning oil supplies this year have weighed on oil prices. Investors will be looking to the latest US inventory data later yesterday and today from the American Petroleum Institute and the Energy Information Administration.
"The problem is really that we have a lot of crude inventory,' said Victor Shum,an analyst with consultancy Purvin &Gertz in Singapore. "This supply overhang makes the price vulnerable to any bad economic news, which we still get from time to time."
"It's more likely the price will hang around $70."
In other Nymex trading, heating oil rose 1.42 cents to $1.94 a gallon. Gasoline for November delivery gained 1.85 cents to $1.85 a gallon. Natural gas for November delivery jumped 4.5 cents to $4.63 per 1,000 cubic feet.
In London, Brent crude rose 71 cents to $73.11 on the ICE Futures exchange.
With little reprieve seen for the dollar, investors have sought to protect themselves against the greenback's fall by buying hard assets such as oil and other commodities.
Michael Malpede at Easy Forex said the move by investors into oil, gold and other commodities quoted in dollars also weighed on the greenback.
Renewed hopes of stronger energy demand driven by signs of global economic recovery and the arrival of cold weather in the United States, the world's largest oil user, also lent support to crude prices, traders said.
Benchmark crude for November delivery was up 73 cents to $74.88 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The price reached $75.15 earlier in the day, the highest since October 2008.
The contract gained 88 cents to settle at $74.15 on Tuesday.
Oil has traded between $65 and $75 since May as traders have mulled mixed crude supply and demand data.
Some analysts expect an increase in diesel fuel demand from US truckers supplying inventor y for the year-end holiday shopping season will tr igger a sustained rise above $75.
" We believe oil prices are poised to move higher," Goldman Sachs, which expects prices to rise to $85 a barrel by the end of the year, said in a report. "All indicators still point to a normal seasonal pick-up in shipping to retailers this year.'
A weak dollar is also bolstering crude prices. The euro rose to $1.4890, the highest since August 2008, in Asian trading from $1.4852 the previous day while the dollar slid to 89.15 yen from 89.69.
Burgeoning oil supplies this year have weighed on oil prices. Investors will be looking to the latest US inventory data later yesterday and today from the American Petroleum Institute and the Energy Information Administration.
"The problem is really that we have a lot of crude inventory,' said Victor Shum,an analyst with consultancy Purvin &Gertz in Singapore. "This supply overhang makes the price vulnerable to any bad economic news, which we still get from time to time."
"It's more likely the price will hang around $70."
In other Nymex trading, heating oil rose 1.42 cents to $1.94 a gallon. Gasoline for November delivery gained 1.85 cents to $1.85 a gallon. Natural gas for November delivery jumped 4.5 cents to $4.63 per 1,000 cubic feet.
In London, Brent crude rose 71 cents to $73.11 on the ICE Futures exchange.
With little reprieve seen for the dollar, investors have sought to protect themselves against the greenback's fall by buying hard assets such as oil and other commodities.
Michael Malpede at Easy Forex said the move by investors into oil, gold and other commodities quoted in dollars also weighed on the greenback.
Renewed hopes of stronger energy demand driven by signs of global economic recovery and the arrival of cold weather in the United States, the world's largest oil user, also lent support to crude prices, traders said.
Tuesday, October 13, 2009
Egat weighs B8bn expansion
The Electricity Generating Authority of Thailand is considering investing 8 billion baht to double the capacity of the Lam Ta Khong hydropower plant to 1,000 megawatts to cope with frequent gas supply shortages.
Governor Sombat Sarntijaree said Egat is conducting a feasibility study on doubling the capacity of the Nakhon Ratchasima plant. If completed in time,the change will be added to the authority's new 15-year power development plan which is currently under review.
The state-run utility has had three gas supply disruptions since August,which caused damages of more than one billion baht, as Egat had to run generators by hydropower, diesel, fueloil or gas which was purchased from more expensive-than-normal sources.
This caused a loss of two satang of fuel tariff per kilowatt hour (unit), but Egat is in talks with the Energy Ministry and PTT, the country's sole natural gas pipeline operator, over compensation.
As a result, Egat recently raised its emergency fuel-oil stock to five days of daily power plant demand from three.
PTT reported to Egat on Oct 10 that its Bongkot gas field needed to extend its gas pipeline repair period to Oct 21 from an previous shorter estimate.
"Until the repair is complete, we have been using fuel-oil to replace what is usually 400 million cubic feet a day of gas supplies," said Mr Sombat.
For the period, Egat expects to use approximately 82 million litres of fueloil, a cost of 700 million baht.
PTT suspended supplies from Bongkot to repair the pipeline.
Bongkot is operated by PTT Exploration & Production Plc, which owns 44.5% of the field, while a unit of Frenchbased Total SA holds 33.3%, and a unit of BG Group Plc has 22.2%.
In another development, Egat signed a joint venture yesterday with Mitsubishi Heavy Industries for a new gas-turbine repair centre in Thailand.
Egat and Misubishi both control 45%of the company, while Ratchaburi Elec-tricity Generation Holding Plc holds 10% of the new firm which is named Egat Diamond Co.
Ken Kawai, deputy general manager of Mitsubishi Heavy Industries, said the group has sold more than 200 gas turbines across Asia, including 20 in Thailand.
While power generation producers will provide technology transfer to the Thai utility, Egat will give support by providing facilities and human resources for the new venture.
The firm has 830 million baht in registered capital and will start operation in 2011, with full capacity available by 2014.
The centre will cover 18 countries in the South Asia, Southeast Asia and Oceania regions.
Shares of PTT closed on the Stock Exchange of Thailand at 270 baht, up one baht, in trade worth 1.36 billion baht.
Governor Sombat Sarntijaree said Egat is conducting a feasibility study on doubling the capacity of the Nakhon Ratchasima plant. If completed in time,the change will be added to the authority's new 15-year power development plan which is currently under review.
The state-run utility has had three gas supply disruptions since August,which caused damages of more than one billion baht, as Egat had to run generators by hydropower, diesel, fueloil or gas which was purchased from more expensive-than-normal sources.
This caused a loss of two satang of fuel tariff per kilowatt hour (unit), but Egat is in talks with the Energy Ministry and PTT, the country's sole natural gas pipeline operator, over compensation.
As a result, Egat recently raised its emergency fuel-oil stock to five days of daily power plant demand from three.
PTT reported to Egat on Oct 10 that its Bongkot gas field needed to extend its gas pipeline repair period to Oct 21 from an previous shorter estimate.
"Until the repair is complete, we have been using fuel-oil to replace what is usually 400 million cubic feet a day of gas supplies," said Mr Sombat.
For the period, Egat expects to use approximately 82 million litres of fueloil, a cost of 700 million baht.
PTT suspended supplies from Bongkot to repair the pipeline.
Bongkot is operated by PTT Exploration & Production Plc, which owns 44.5% of the field, while a unit of Frenchbased Total SA holds 33.3%, and a unit of BG Group Plc has 22.2%.
In another development, Egat signed a joint venture yesterday with Mitsubishi Heavy Industries for a new gas-turbine repair centre in Thailand.
Egat and Misubishi both control 45%of the company, while Ratchaburi Elec-tricity Generation Holding Plc holds 10% of the new firm which is named Egat Diamond Co.
Ken Kawai, deputy general manager of Mitsubishi Heavy Industries, said the group has sold more than 200 gas turbines across Asia, including 20 in Thailand.
While power generation producers will provide technology transfer to the Thai utility, Egat will give support by providing facilities and human resources for the new venture.
The firm has 830 million baht in registered capital and will start operation in 2011, with full capacity available by 2014.
The centre will cover 18 countries in the South Asia, Southeast Asia and Oceania regions.
Shares of PTT closed on the Stock Exchange of Thailand at 270 baht, up one baht, in trade worth 1.36 billion baht.
Sunday, October 11, 2009
Bangchak introduces country's second EJIP
Bangchak Petroleum kicked off its Employee Joint Investment Programme (EJIP) this month, aiming to create a strong bond between the organisation and employees.
President Anusorn Sangnimnuan said late last week that the Securities and Exchange Commission had already approved the programme.
The move follows that by CP All, the 7-11 convenience store operator, which was the first listed company joining the EJIP plan, which has Phillips Securities (Thailand) as its operator.
The Bangchak programme encourages and supports employees and the management to invest in the company's stocks as a mean to provide a return to both parties.
The two-year programme ends in September 2011, and employees can join on a voluntary basis.
Under the scheme, the company will deduct a maximum of 5 per cent from the monthly salary of programme members every month in order to create the fund.
It will also contribute to the fund at the rate of 7.5 per cent of the salary of each programme member per month.
The fund will be used to buy Bangchak stock or BCP-DR1 warrants, with the right to convert to Bangchak shares, in the stock exchange on the determined date every month.
Programme members can sell the company's shares directly in the stock market when the programme is six months old on March 31, 2010, but the shares to be sold must not exceed the amount they purchase during the first six months.
When the programme period reaches 18 months on March 31, 2011, they can sell shares at the amount they have purchased during the first 12 months of the scheme - and all their shares when the programme ends.
Anusorn said Bangchak would launch a second EJIP if the first programme proved successful.
Bangchak shares closed at Bt14 on Friday, up 0.72 per cent from the previous day.
President Anusorn Sangnimnuan said late last week that the Securities and Exchange Commission had already approved the programme.
The move follows that by CP All, the 7-11 convenience store operator, which was the first listed company joining the EJIP plan, which has Phillips Securities (Thailand) as its operator.
The Bangchak programme encourages and supports employees and the management to invest in the company's stocks as a mean to provide a return to both parties.
The two-year programme ends in September 2011, and employees can join on a voluntary basis.
Under the scheme, the company will deduct a maximum of 5 per cent from the monthly salary of programme members every month in order to create the fund.
It will also contribute to the fund at the rate of 7.5 per cent of the salary of each programme member per month.
The fund will be used to buy Bangchak stock or BCP-DR1 warrants, with the right to convert to Bangchak shares, in the stock exchange on the determined date every month.
Programme members can sell the company's shares directly in the stock market when the programme is six months old on March 31, 2010, but the shares to be sold must not exceed the amount they purchase during the first six months.
When the programme period reaches 18 months on March 31, 2011, they can sell shares at the amount they have purchased during the first 12 months of the scheme - and all their shares when the programme ends.
Anusorn said Bangchak would launch a second EJIP if the first programme proved successful.
Bangchak shares closed at Bt14 on Friday, up 0.72 per cent from the previous day.
Saturday, October 10, 2009
A financial revolution with profound political implications
The plan to de-dollarise the oil market, discussed both in public and in secret for at least two years and widely denied last week by the usual suspects - Saudi Arabia being, as expected, the first among them - reflects a growing resentment in the Middle East, Europe and in China at America's decades-long political as well as economic world dominance.
Nowhere has this more symbolic importance than in the Middle East, where the United Arab Emirates alone holds $900 billion (29.9 trillion baht) of dollar reserves and where Saudi Arabia has been quietly coordinating its defence,armaments and oil policies with the Russians since 2007.
This does not indicate a trade war with America - not yet - but Arab Gulf regimes have been growing increasingly restive at their economic as well as political dependence on Washington for many years. Of the $7.2 trillion in international reserves,$2.1trn is held by Arab countries - China holds about $2.3trn - and the nations interested in moving away from dollar-trading in oil are believed to hold over 80% of international dollar reserves.
Saudi Arabia's denials of any such ambitions were regarded by Arab bankers as a normal part of Gulf politics. The Saudis, of course, managed to deny that Iraq had invaded Kuwait in 1990.
Saudi bankers are well aware that in nine years' time - the current timeframe for a transition away from the dollar in oil trading - China will have doubled its national income to $10trn (assuming a growth rate of 7%), at which point the US might hold no more than 20% of the world's gross income.
Such massive financial movements,encouraged by the de-dollarisation of oil, will have enormous political effects in the Middle East, especially if economic superpower rivalry between America and China comes to dominate the Arab world.Will American economic support for Israel remain as loyal in nine years' time if China and the Arabs are setting the pace in global financial markets? Indeed - perhaps with this in mind - some Israeli financiers have been expressing interest over the past two years in nondollar Arab bank investments. Whenever a change of this magnitude takes place over a number of years, it has to be commenced in secrecy.
Nor can it be denied that the very project to take oil trading away from the dollar market has deep political roots.The collapse of the Soviet Union has allowed the US to dominate the Middle East more than any other world region,and the Arabs - who can no longer contemplate an oil boycott of the kind they imposed on the West after the 1973 Middle East war - are still anxious to prove that they can flex their economic power to bring about change.
Saudi Arabia's pan-Arab offer to recognise Israel and its security in return for an Israeli withdrawal from occupied Arab land is not - according to the Saudis themselves - indefinite. If they are ignored or rebuffed, then they can search for other allies through new financial institutions to force a new Middle East peace. China will be happy to help.
Nowhere has this more symbolic importance than in the Middle East, where the United Arab Emirates alone holds $900 billion (29.9 trillion baht) of dollar reserves and where Saudi Arabia has been quietly coordinating its defence,armaments and oil policies with the Russians since 2007.
This does not indicate a trade war with America - not yet - but Arab Gulf regimes have been growing increasingly restive at their economic as well as political dependence on Washington for many years. Of the $7.2 trillion in international reserves,$2.1trn is held by Arab countries - China holds about $2.3trn - and the nations interested in moving away from dollar-trading in oil are believed to hold over 80% of international dollar reserves.
Saudi Arabia's denials of any such ambitions were regarded by Arab bankers as a normal part of Gulf politics. The Saudis, of course, managed to deny that Iraq had invaded Kuwait in 1990.
Saudi bankers are well aware that in nine years' time - the current timeframe for a transition away from the dollar in oil trading - China will have doubled its national income to $10trn (assuming a growth rate of 7%), at which point the US might hold no more than 20% of the world's gross income.
Such massive financial movements,encouraged by the de-dollarisation of oil, will have enormous political effects in the Middle East, especially if economic superpower rivalry between America and China comes to dominate the Arab world.Will American economic support for Israel remain as loyal in nine years' time if China and the Arabs are setting the pace in global financial markets? Indeed - perhaps with this in mind - some Israeli financiers have been expressing interest over the past two years in nondollar Arab bank investments. Whenever a change of this magnitude takes place over a number of years, it has to be commenced in secrecy.
Nor can it be denied that the very project to take oil trading away from the dollar market has deep political roots.The collapse of the Soviet Union has allowed the US to dominate the Middle East more than any other world region,and the Arabs - who can no longer contemplate an oil boycott of the kind they imposed on the West after the 1973 Middle East war - are still anxious to prove that they can flex their economic power to bring about change.
Saudi Arabia's pan-Arab offer to recognise Israel and its security in return for an Israeli withdrawal from occupied Arab land is not - according to the Saudis themselves - indefinite. If they are ignored or rebuffed, then they can search for other allies through new financial institutions to force a new Middle East peace. China will be happy to help.
Friday, October 9, 2009
PTT ponders group appeal
In order to ease the impact on its fiveyear investment plan of a court injunction to suspend 76 industrial projects in Map Ta Phut, PTT Plc is seeking new ways to move its projects forward, said PTT chief financial officer Tevin Vongvanich.
"A decision will be made by next week as to whether the private sector will submit an appeal by ourselves. Last week we joined other private companies to study ways to submit an appeal ourselves rather than waiting for state agencies to do this alone," said Mr Tevin.
Projects worth 400 billion baht were ordered to halt construction by the Administrative Court on Sept 29. Of the total,25 are being developed by subsidiaries and affiliates of PTT, with a value of up to 120 billion baht.
The ongoing projects include PTT's sixth gas separation plant, which was due to be operational by the end of this year, petrochemical plants, and an up-graded refinery to meet Euro4 emission standards for its subsidiary PTT Aromatics and Refining (PTTAR).
PTT's five-year investment plan included 230 billion baht for PTT alone excluding its subsidiaries, with most of those projects implemented this year and next.
"If an appeal is rejected, construction and planning will be delayed indefinitely," said Mr Tevin.
Financial institutions that provided loans to PTT have not asked it to return the money, as they are willing to support PTT, he added.
He said he also supported the private companies' joint proposal that the government establish a 100-billion-baht fund to alleviate the economic suffering of firms that have been affected by the order.
Shares of PTT closed yesterday on the Stock Exchange of Thailand at 269 baht, up two baht, in trade worth 1.99 billion baht.
"A decision will be made by next week as to whether the private sector will submit an appeal by ourselves. Last week we joined other private companies to study ways to submit an appeal ourselves rather than waiting for state agencies to do this alone," said Mr Tevin.
Projects worth 400 billion baht were ordered to halt construction by the Administrative Court on Sept 29. Of the total,25 are being developed by subsidiaries and affiliates of PTT, with a value of up to 120 billion baht.
The ongoing projects include PTT's sixth gas separation plant, which was due to be operational by the end of this year, petrochemical plants, and an up-graded refinery to meet Euro4 emission standards for its subsidiary PTT Aromatics and Refining (PTTAR).
PTT's five-year investment plan included 230 billion baht for PTT alone excluding its subsidiaries, with most of those projects implemented this year and next.
"If an appeal is rejected, construction and planning will be delayed indefinitely," said Mr Tevin.
Financial institutions that provided loans to PTT have not asked it to return the money, as they are willing to support PTT, he added.
He said he also supported the private companies' joint proposal that the government establish a 100-billion-baht fund to alleviate the economic suffering of firms that have been affected by the order.
Shares of PTT closed yesterday on the Stock Exchange of Thailand at 269 baht, up two baht, in trade worth 1.99 billion baht.
Wednesday, October 7, 2009
EIA raises global oil demand forecast
The US Energy Information Administration on Tuesday raised its outlook for world oil demand at the end of 2009 and next year, as the economies in China and other Asian countries begin to recover.
In its new monthly energy forecast,the agency said it now expected a 410,000 barrel-per-day increase in the fourth quarter of 2009 from the same period a year ago.
The EIA's previous forecast estimated just a 240,000-bpd rise in fourth quarter demand.
Developing nations will lead this rise in world oil consumption.
"Sustained economic growth in China and signs of a turnaround in other Asian countries continue to fuel expectations of a global recovery in world oil consumption," the EIA said.
Chinese oil demand was revised upward to 8.17 million bpd for 2009 from a previous estimate of 8.08 million bpd.
China's rapid economic growth was one of the key drivers of oil's six-year rally that sent prices up to near $150 a barrel last year.
World petroleum demand is still expected to drop overall in 2009 to 83.67 million bpd, well below the 2008 level of 85.46 million bpd.
The EIA estimates world oil consumption will rebound in 2010, climbing 1.1 million bpd compared with 2009. Last month the agency had projected a smaller increase of 910,000 bpd.
Even with strong demand from Asia,world consumption levels are not ex-pected to return to levels seen before the global economic collapse for more than year, EIA head Richard Newell said.
"There's a significant degree of uncertainty about what the economic recovery is going to look like: whether it's significant and fast ... or whether it's slow and evolved," he told reporters at an event focused on the winter fuels outlook.
"That will have the biggest impact on the global oil consumption," Newell said.
World petroleum consumption topped out at nearly 86 million bpd in 2007 before the global recession took its toll.
In the United States, the world's largest petroleum consumer, oil demand is expected to fall 330,000 bpd in the fourth quarter from a year earlier.
US oil consumption in 2010 was revised up, with the EIA now expecting a 320,000-bpd increase in demand compared with 2009.
On the supply side, the EIA raised its forecast for Opec crude oil production next year to 29.19 million bpd from its prior estimate of 28.89 million bpd.
"Oil inventories remain high and EIA expects oil production by the Organisation of (the) Petroleum Exporting Countries to increase as well," the agency said.
The EIA also raised its projection for oil output from non-Opec countries in 2010 to 50.26 million bpd from its previous estimate of 50.19 million bpd.
"Over the forecast period, higher output from Brazil, the United States, Azerbaijan, Kazakhstan and Canada should offset falling production in Mexico and the North Sea," the agency said.
In its new monthly energy forecast,the agency said it now expected a 410,000 barrel-per-day increase in the fourth quarter of 2009 from the same period a year ago.
The EIA's previous forecast estimated just a 240,000-bpd rise in fourth quarter demand.
Developing nations will lead this rise in world oil consumption.
"Sustained economic growth in China and signs of a turnaround in other Asian countries continue to fuel expectations of a global recovery in world oil consumption," the EIA said.
Chinese oil demand was revised upward to 8.17 million bpd for 2009 from a previous estimate of 8.08 million bpd.
China's rapid economic growth was one of the key drivers of oil's six-year rally that sent prices up to near $150 a barrel last year.
World petroleum demand is still expected to drop overall in 2009 to 83.67 million bpd, well below the 2008 level of 85.46 million bpd.
The EIA estimates world oil consumption will rebound in 2010, climbing 1.1 million bpd compared with 2009. Last month the agency had projected a smaller increase of 910,000 bpd.
Even with strong demand from Asia,world consumption levels are not ex-pected to return to levels seen before the global economic collapse for more than year, EIA head Richard Newell said.
"There's a significant degree of uncertainty about what the economic recovery is going to look like: whether it's significant and fast ... or whether it's slow and evolved," he told reporters at an event focused on the winter fuels outlook.
"That will have the biggest impact on the global oil consumption," Newell said.
World petroleum consumption topped out at nearly 86 million bpd in 2007 before the global recession took its toll.
In the United States, the world's largest petroleum consumer, oil demand is expected to fall 330,000 bpd in the fourth quarter from a year earlier.
US oil consumption in 2010 was revised up, with the EIA now expecting a 320,000-bpd increase in demand compared with 2009.
On the supply side, the EIA raised its forecast for Opec crude oil production next year to 29.19 million bpd from its prior estimate of 28.89 million bpd.
"Oil inventories remain high and EIA expects oil production by the Organisation of (the) Petroleum Exporting Countries to increase as well," the agency said.
The EIA also raised its projection for oil output from non-Opec countries in 2010 to 50.26 million bpd from its previous estimate of 50.19 million bpd.
"Over the forecast period, higher output from Brazil, the United States, Azerbaijan, Kazakhstan and Canada should offset falling production in Mexico and the North Sea," the agency said.
Monday, October 5, 2009
Ruling may cost PTT 10% of earnings
The earnings of PTT Group and its subsidiaries may fall 10% in 2010 due to court-ordered construction delays at its projects in the Map Ta Phut industrial estate in Rayong, according to Thanachart Securities.
The court ruling, which affects 76 industrial projects, could also delay PTT's planned consolidation of its petrochemical units, the brokerage said yesterday.
"If construction of PTT's sixth gas separation plant cannot finish by the first or second quarter of next year, the group's net profit in 2010 will be lower than the forecast," said Pichai Lertsupongkit, senior vice-president at Thanachart.
The brokerage earlier forecast PTT's earnings would reach 78.13 billion baht next year, up from an estimated 54.88 billion this year.
The 25 PTT projects affected by the court ruling in-B54.88bn clude PTTCH's one-million-tonne ethylene cracker, which was expected to start in the final quarter of 2009. In the worst-case scenario, PTTCH's new cracker and downstream businesses could be delayed from the original schedule to the end of 2010, slicing almost 36% from forecast earnings of 8.66 billion baht.
Without its oil upgrading unit, PTTAR,an oil refining and petrochemical maker,could fall 5% short of its projected earnings of 11.6 billion baht, Thanachart said in its report released yesterday.
The uncertainty continues to hang over the share prices of PTT, PTTAR,PTTCH and Siam Cement, another m-
jor industrial conglomerate affected by the ruling, the report said.B78.13bn
"It's highly likely the announcement of merger deals among PTT associates could be delayed further primarily due to the court order to suspend various projects of PTTAR and PTTCH."
The suspension means the revision of valuations and swap ratios of these firms, the report added.
"We believe the private sector should be protected as they have followed the government agencies' rules," it added.
PTTAR executives yesterday declined to give a figure for the impact of the court decision, saying the affected companies could not evaluate the size of damages with the current information.
"We don't even know what we can do, what we cannot do and what we have to do," said Chainoi Puankosoom,chief executive of PTTAR.
"Each subsidiary of PTT is examining the court ruling in detail in order to evaluate the actual damages. We can't say anything otherwise we will be considered as bad guys. It's the government's responsibility to clear the issue."
The company is considering how to cope with the effects of the operations'suspension, he added."We will talk with our contractors for the US$220-million upgrading project to consider our case as force majeure , as it was beyond our control. We hope they may understand and will not be to harsh in suing us," said Mr Chainoi.
Construction on the upgrade was due to start by the year-end and operations were planned to start in 2011, he said.
The Energy Ministry will also have to put off the new Euro 4 emission standard to 2011, since the upgraded oil refining units that could meet the standard cannot operate due to the court's ruling.
"We are ready to do anything whether they [the environmentalists and the court] want us to go ahead, or make a new EIA (environmental impact assessment), health impact assessment or do both EIA and HIA, just say it. So far we are stuck. Everything seems very uncertain," said Mr Chainoi.
PTT shares closed yesterday on the SET at 258 baht, down three baht, in trade worth 767.5 million baht. PTTAR fell 40 satang to 24.10 baht.
The court ruling, which affects 76 industrial projects, could also delay PTT's planned consolidation of its petrochemical units, the brokerage said yesterday.
"If construction of PTT's sixth gas separation plant cannot finish by the first or second quarter of next year, the group's net profit in 2010 will be lower than the forecast," said Pichai Lertsupongkit, senior vice-president at Thanachart.
The brokerage earlier forecast PTT's earnings would reach 78.13 billion baht next year, up from an estimated 54.88 billion this year.
The 25 PTT projects affected by the court ruling in-B54.88bn clude PTTCH's one-million-tonne ethylene cracker, which was expected to start in the final quarter of 2009. In the worst-case scenario, PTTCH's new cracker and downstream businesses could be delayed from the original schedule to the end of 2010, slicing almost 36% from forecast earnings of 8.66 billion baht.
Without its oil upgrading unit, PTTAR,an oil refining and petrochemical maker,could fall 5% short of its projected earnings of 11.6 billion baht, Thanachart said in its report released yesterday.
The uncertainty continues to hang over the share prices of PTT, PTTAR,PTTCH and Siam Cement, another m-
jor industrial conglomerate affected by the ruling, the report said.B78.13bn
"It's highly likely the announcement of merger deals among PTT associates could be delayed further primarily due to the court order to suspend various projects of PTTAR and PTTCH."
The suspension means the revision of valuations and swap ratios of these firms, the report added.
"We believe the private sector should be protected as they have followed the government agencies' rules," it added.
PTTAR executives yesterday declined to give a figure for the impact of the court decision, saying the affected companies could not evaluate the size of damages with the current information.
"We don't even know what we can do, what we cannot do and what we have to do," said Chainoi Puankosoom,chief executive of PTTAR.
"Each subsidiary of PTT is examining the court ruling in detail in order to evaluate the actual damages. We can't say anything otherwise we will be considered as bad guys. It's the government's responsibility to clear the issue."
The company is considering how to cope with the effects of the operations'suspension, he added."We will talk with our contractors for the US$220-million upgrading project to consider our case as force majeure , as it was beyond our control. We hope they may understand and will not be to harsh in suing us," said Mr Chainoi.
Construction on the upgrade was due to start by the year-end and operations were planned to start in 2011, he said.
The Energy Ministry will also have to put off the new Euro 4 emission standard to 2011, since the upgraded oil refining units that could meet the standard cannot operate due to the court's ruling.
"We are ready to do anything whether they [the environmentalists and the court] want us to go ahead, or make a new EIA (environmental impact assessment), health impact assessment or do both EIA and HIA, just say it. So far we are stuck. Everything seems very uncertain," said Mr Chainoi.
PTT shares closed yesterday on the SET at 258 baht, down three baht, in trade worth 767.5 million baht. PTTAR fell 40 satang to 24.10 baht.
Oil lingers below $70 as traders eye earnings
Oil prices lingered below $70 a barrel yesterday in Asia as investors looked to third quarter company earnings reports this week for clues about the health of the US economy.
Benchmar k crude for November deliver was down 20 cents at $69.75 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to settle at $69.95 on Friday.
Last week, weak economic data w eighed on crude prices. The US reported worse than expected manufacturing and jobs numbers, with the unemployment rate rising to 9.8% in September, the highest since 1983.
US oil inventory data was mixed last week, suggesting consumer demand has yet to rebound strongly from the recession.
"Economic and oil data remain consistent with a macro economy just beginning to push off the trough, leaving markets with a lack of clear direction," Goldman Sachs said in a report.
Traders will be eyeing the first earnings for the July to September period,with Aluminum producer Alcoa Inc, PepsiCo Inc and Marriott International Inc scheduled to report this week.
In other Nymex trading, heating oil fell 1.04 cents to $1.79 a gallon. Gasoline for November delivery held at $1.74 a gallon.Natural gas for November deli-very dropped 3.6 cents to $4.68 per 1,000 cubic feet.
In London, Brent crude fell 25 cents to $67.82 on the ICE Futures exchange.
"A slew of economic data (last week)rekindled worries over the prospects of a recovery in the United States,' said JBC Energy analysts in a note to clients.
Data released Friday showed the US economy was struggling to recover from re cession as job losses accelerated to 263,000, sending the unemployment rate to a 26-year high of 9.8% in September.
Payroll losses were far worse than expectations for a loss of 175,000 jobs,while there was an upwardly revised loss of 201,000 in August.
Payrolls have dropped for 21 consecutive months and since the start of the re cession, the number of jobless has increased 7.6 million to 15.1 million,while unemployment has doubled to 9.8%, Labour Department figures show.
"There are ongoing worries about the pace of economic recovery after the disappointing US jobs data,' added Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
"At the top of traders' minds now is the pace of economic recovery and the US economic situation still looks shaky,"he said.
Benchmar k crude for November deliver was down 20 cents at $69.75 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to settle at $69.95 on Friday.
Last week, weak economic data w eighed on crude prices. The US reported worse than expected manufacturing and jobs numbers, with the unemployment rate rising to 9.8% in September, the highest since 1983.
US oil inventory data was mixed last week, suggesting consumer demand has yet to rebound strongly from the recession.
"Economic and oil data remain consistent with a macro economy just beginning to push off the trough, leaving markets with a lack of clear direction," Goldman Sachs said in a report.
Traders will be eyeing the first earnings for the July to September period,with Aluminum producer Alcoa Inc, PepsiCo Inc and Marriott International Inc scheduled to report this week.
In other Nymex trading, heating oil fell 1.04 cents to $1.79 a gallon. Gasoline for November delivery held at $1.74 a gallon.Natural gas for November deli-very dropped 3.6 cents to $4.68 per 1,000 cubic feet.
In London, Brent crude fell 25 cents to $67.82 on the ICE Futures exchange.
"A slew of economic data (last week)rekindled worries over the prospects of a recovery in the United States,' said JBC Energy analysts in a note to clients.
Data released Friday showed the US economy was struggling to recover from re cession as job losses accelerated to 263,000, sending the unemployment rate to a 26-year high of 9.8% in September.
Payroll losses were far worse than expectations for a loss of 175,000 jobs,while there was an upwardly revised loss of 201,000 in August.
Payrolls have dropped for 21 consecutive months and since the start of the re cession, the number of jobless has increased 7.6 million to 15.1 million,while unemployment has doubled to 9.8%, Labour Department figures show.
"There are ongoing worries about the pace of economic recovery after the disappointing US jobs data,' added Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.
"At the top of traders' minds now is the pace of economic recovery and the US economic situation still looks shaky,"he said.
RULING COULD SLASH ECONOMIC GROWTH
A year-long court-ordered suspension of investment projects by PTT and other state enterprises could slice 0.4 percentage points off economic growth next year, Finance Minister Korn Chatikavanij said yesterday.
The economic impact of the long-running environmental dispute between heavy industry and communities around the Map Ta Phut Industrial Estate could be considerable, Korn said during a videoconference from Turkey.
Last Tuesday, the Central Administrative Court issued an injunction against 76 industrial projects worth Bt400 billion in Map Ta Phut and surrounding areas in Rayong.
The government has appealed the court ruling.
Prime Minister Abhisit Vejjajiva also expressed concern that foreign investors could be driven away and locate their plants in neighbouring countries like Vietnam, due to environmental and regulatory issues.
Korn, who is attending the twin annual meetings of the International Monetary Fund and the World Bank in Istanbul, said PTT and other state enterprises planned to spend Bt240 billion in 2010 and 2011 under the government's second stimulus package. These projects could be further delayed, because they are related to the 76 projects halted by the court.
Of these investment plans, PTT, the country's largest energy conglomerate, alone will pour Bt100 billion into Map Ta Phut.
In the event these investment schemes are delayed for a year, growth in the country's gross domestic product (GDP) could be dented 0.4 percentage points next year, he said.
This is a major concern for the government, he said.
Public- and private-sector analysts have predicted GDP will expand 2-3 per cent next year if large-scale public and industrial investment schemes are implemented as planned.
Political uncertainty is another factor causing the jitters for foreign investors, he said.
On another note, Asean finance ministers have agreed to create an Asean Infrastructure Fund to invest in regional projects, he said.
This will be endorsed by Asean leaders during their summit in the Thai resort of Hua Hin later this month.
Asean also plans to set up |a panel to select cities where |the head office for the multilateralisation of the Chiang Mai Initiative, a reserve pool among Asean and Japan, China and South Korea, will be situated.
The US$120-billion (Bt4 trillion) reserve pool, aimed at providing an emergency credit line to members in times of financial crisis, will be kicked off next year.
Korn said he had proposed Bangkok as a candidate.
The economic impact of the long-running environmental dispute between heavy industry and communities around the Map Ta Phut Industrial Estate could be considerable, Korn said during a videoconference from Turkey.
Last Tuesday, the Central Administrative Court issued an injunction against 76 industrial projects worth Bt400 billion in Map Ta Phut and surrounding areas in Rayong.
The government has appealed the court ruling.
Prime Minister Abhisit Vejjajiva also expressed concern that foreign investors could be driven away and locate their plants in neighbouring countries like Vietnam, due to environmental and regulatory issues.
Korn, who is attending the twin annual meetings of the International Monetary Fund and the World Bank in Istanbul, said PTT and other state enterprises planned to spend Bt240 billion in 2010 and 2011 under the government's second stimulus package. These projects could be further delayed, because they are related to the 76 projects halted by the court.
Of these investment plans, PTT, the country's largest energy conglomerate, alone will pour Bt100 billion into Map Ta Phut.
In the event these investment schemes are delayed for a year, growth in the country's gross domestic product (GDP) could be dented 0.4 percentage points next year, he said.
This is a major concern for the government, he said.
Public- and private-sector analysts have predicted GDP will expand 2-3 per cent next year if large-scale public and industrial investment schemes are implemented as planned.
Political uncertainty is another factor causing the jitters for foreign investors, he said.
On another note, Asean finance ministers have agreed to create an Asean Infrastructure Fund to invest in regional projects, he said.
This will be endorsed by Asean leaders during their summit in the Thai resort of Hua Hin later this month.
Asean also plans to set up |a panel to select cities where |the head office for the multilateralisation of the Chiang Mai Initiative, a reserve pool among Asean and Japan, China and South Korea, will be situated.
The US$120-billion (Bt4 trillion) reserve pool, aimed at providing an emergency credit line to members in times of financial crisis, will be kicked off next year.
Korn said he had proposed Bangkok as a candidate.
Friday, October 2, 2009
Esso on good corporate citizenship with varied activities for society
Exxon Mobil Corporation, the parent company of Esso (Thailand) Public Company Limited, and its affiliated around the globe operate on the same corporate citizenship fundamental and a strong aspiration to perform business ethically, respect the law of the countries in which they operate, operate in compliance with local cultures and communities, and, most importantly, emphasize safety for both their personnel and neighboring comm unities.
Over recent years, Esso has carried out a number of ongoing socially beneficial projects in "Esso Challene - Innovative Internship" whose objective is to enhance the potential and ethical standing of university students by providing them opportunities to attend training programs and receive internships.
This project has been organized annually since 2005 with collaboration between Esso and ExxonMobil's affiliates in Thailand to prepare university students to work efficient and ethically to satisfy the demands of the Thai business sector, which are major factors in enabling local organizations to rise to international levels.
The "Esso Challenge - Innovative Intership" project allows third-year university students of various faculties to fully prepare themselves before graduation to become professional and ethical in business. the training sessions are delivered by executives of Esso and ExxonMobil's affiliates in Thailand, as well as lecturers frrom leading academic institutes.
Intern students receive training in Integrated Marketing Communications, Creative thinking and Problem Solving, Leadership and Teamwork, Corporate Citizenship, Effective EQ Management, Effective Presentation, and perform various activities under the project.
In addition, they will have a chance to experience the working environment in various department sof Esso, visit the Esso Sriracha Refinery and work at Esso service stations under the Heart of Tiger Services project (H.O.T.S) to learn more about the businesses. Another project that has impressed participating university students is the CSR activity, whose objective is to return benefits to society. "Esso We Car", which is under the CSR and Energy Education Activity project, encourages university students to understanding of energy use and alternatives to elementary students. university students can draw upon their experience from participating in social activities to propose projects and receive scholarship from the the Esso Challenge - iNnovative Internship project and training attendance certificates.
The Esso Challenge 2010 - Innovative Internship project will take place again between March 22- May 31, 2010 under the concept "A Genius Mind". Interested persons can apply to join the project from today until October 12, 2009, via the website www.essochallenge.com.
Mr. Mongkolnimit Auacherdkul, Director and Public and Government Affairs Manager of Esso(Thailand) Public Company Limited
At Esso, we pay atention to every steps of operations from wells to wheels with emphasis on quality. We take as prime responsibilities the care for employees, communities and national societies. Wherever we operate, we place importance to surrounding communities and listen to them. The comany has set up several development projects in return to the society in various fileds for equality for all. All elecments have to co-exist and relate to earch other. We can't place importance on only one element. As a good corporate citizen, participating in social development is regarded as a duty of all employees to help improve our sicity as a whole.
Over recent years, Esso has carried out a number of ongoing socially beneficial projects in "Esso Challene - Innovative Internship" whose objective is to enhance the potential and ethical standing of university students by providing them opportunities to attend training programs and receive internships.
This project has been organized annually since 2005 with collaboration between Esso and ExxonMobil's affiliates in Thailand to prepare university students to work efficient and ethically to satisfy the demands of the Thai business sector, which are major factors in enabling local organizations to rise to international levels.
The "Esso Challenge - Innovative Intership" project allows third-year university students of various faculties to fully prepare themselves before graduation to become professional and ethical in business. the training sessions are delivered by executives of Esso and ExxonMobil's affiliates in Thailand, as well as lecturers frrom leading academic institutes.
Intern students receive training in Integrated Marketing Communications, Creative thinking and Problem Solving, Leadership and Teamwork, Corporate Citizenship, Effective EQ Management, Effective Presentation, and perform various activities under the project.
In addition, they will have a chance to experience the working environment in various department sof Esso, visit the Esso Sriracha Refinery and work at Esso service stations under the Heart of Tiger Services project (H.O.T.S) to learn more about the businesses. Another project that has impressed participating university students is the CSR activity, whose objective is to return benefits to society. "Esso We Car", which is under the CSR and Energy Education Activity project, encourages university students to understanding of energy use and alternatives to elementary students. university students can draw upon their experience from participating in social activities to propose projects and receive scholarship from the the Esso Challenge - iNnovative Internship project and training attendance certificates.
The Esso Challenge 2010 - Innovative Internship project will take place again between March 22- May 31, 2010 under the concept "A Genius Mind". Interested persons can apply to join the project from today until October 12, 2009, via the website www.essochallenge.com.
Mr. Mongkolnimit Auacherdkul, Director and Public and Government Affairs Manager of Esso(Thailand) Public Company Limited
At Esso, we pay atention to every steps of operations from wells to wheels with emphasis on quality. We take as prime responsibilities the care for employees, communities and national societies. Wherever we operate, we place importance to surrounding communities and listen to them. The comany has set up several development projects in return to the society in various fileds for equality for all. All elecments have to co-exist and relate to earch other. We can't place importance on only one element. As a good corporate citizen, participating in social development is regarded as a duty of all employees to help improve our sicity as a whole.
LOCALS AFFECTED BY SLICK IN TIMOR SEA
Residents living along the coast of West Timor in East Nusa Tenggara are worried about the impacts of an oil spill in the Timor Sea originating from a leaking well head in Australia.
A Kolbano resident, Daniel Missa, said dozens of residents had experienced nausea and skin irritation after eating dead fish found along the beach.
"Residents didn't know why the fish were dead, so they picked them up and ate them. They apparently suffered from itchiness, felt nauseous and vomited," said Daniel.
A fisherman in Oesapa subdistrict in Kupang, Ridwan, 34, who had just returned from fishing in the Timor Sea on Monday, said the sea was filled with a crude oil slick.
"The surface of the sea is covered by masses of crude oil resembling sand," said Ridwan.
A large part of the slick is in Indonesian waters, he said, but so far none of the authorities have taken responsitility for cleaning the oil spill.
"Eight of my colleagues and I saw with our own eyes the dead fish floating on surface at a distance of around 300 kilometres, emitting a foul smell," he said.
East Nusa Tenggara Governor Frans Leburaya has urged the Australian government and the oil company operating the Montara field - PTT Exploration and Production, Thailand's only publicly traded oil exploration company - to accept responsibility for the incident.
The Montara oil field exploded on August 21. The oil spill, reaching 500,000 litres per day, is moving close to Timor Island, located only 70 nautical miles from the oil field.
"The oil slick is expected to arrive in Kolbano, a densely populated area in South Central Timor regency, by the second week of October," said West Timor Care Foundation director Ferdi Tanoni at a press conference in the provincial capital of Kupang on Wednesday.
"The oil spil took place a month ago but neither countries have taken any concrete steps to overcome the problem. East Nusa Tenggara residents are the most at risk, and environmental destruction has further worsened," he said.
Dozens of fishermen working around Pasir Island and waters off Timor had returned empty-handed, he added.
A Kolbano resident, Daniel Missa, said dozens of residents had experienced nausea and skin irritation after eating dead fish found along the beach.
"Residents didn't know why the fish were dead, so they picked them up and ate them. They apparently suffered from itchiness, felt nauseous and vomited," said Daniel.
A fisherman in Oesapa subdistrict in Kupang, Ridwan, 34, who had just returned from fishing in the Timor Sea on Monday, said the sea was filled with a crude oil slick.
"The surface of the sea is covered by masses of crude oil resembling sand," said Ridwan.
A large part of the slick is in Indonesian waters, he said, but so far none of the authorities have taken responsitility for cleaning the oil spill.
"Eight of my colleagues and I saw with our own eyes the dead fish floating on surface at a distance of around 300 kilometres, emitting a foul smell," he said.
East Nusa Tenggara Governor Frans Leburaya has urged the Australian government and the oil company operating the Montara field - PTT Exploration and Production, Thailand's only publicly traded oil exploration company - to accept responsibility for the incident.
The Montara oil field exploded on August 21. The oil spill, reaching 500,000 litres per day, is moving close to Timor Island, located only 70 nautical miles from the oil field.
"The oil slick is expected to arrive in Kolbano, a densely populated area in South Central Timor regency, by the second week of October," said West Timor Care Foundation director Ferdi Tanoni at a press conference in the provincial capital of Kupang on Wednesday.
"The oil spil took place a month ago but neither countries have taken any concrete steps to overcome the problem. East Nusa Tenggara residents are the most at risk, and environmental destruction has further worsened," he said.
Dozens of fishermen working around Pasir Island and waters off Timor had returned empty-handed, he added.
Oil falls below $70 after surging overnight
Oil prices fell below $70 a barrel yesterday after surging overnight on signs US gasoline demand may be improving. Weaker equity markets and gains by the dollar helped push down oil prices.
Benchmark crude for November deliver was down 72 cents at $69.89 by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange.
The contract jumped $3.90 to settle at $70.61 on Wednesday after the Energy Information Administration said US gasoline stockpiles unexpectedly dropped 1.6 million barrels last week from the previous week.
Analysts had expected a jump of 1.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The EIA also said demand for gasoline over the four weeks ended Sept 25 was 5.4% higher than last year.
"Gasoline demand continues to improve," Barclays Capital said in a report."We see the global market adjustment as remaining on track for a slow and steady soft landing for both prices and quantities.'
Barclays said it expects crude to average $76 a barrel in the fourth quarter and $85 next year.
Other inventory data was less encour-aging. Crude supplies grew more than expected last week, according to the government report, and they have now swelled to 11.4% above what they were last year.
Analysts said a multitude of US economic data to be released yesterday and today _weekly jobless claims, pending home sales, construction spending, auto sales and non-farm payroll data, among others _could push and pull on prices.'We are not ready to have a conviction in any trends,' said Olivier Jakob of Petromatrix in Switzerland. 'Further violent moves can be expected but the recent ranges are likely to remain respected."
In other Nymex trading, gasoline for November delivery fell 1.97 cents to $1.7319 a gallon, and heating oil lost 2.23 cents to $1.8101 a gallon. Natural gas retreated 7.2 cents to $4.769 per 1,000 cubic feet.
In London, Brent crude fell 77 cents to $68.30 on the ICE Futures exchange.
Also on Wednesday, energy traders digested official data that showed a jump in US crude stockpiles last week, implying stronger demand and also boosting prices.
"Oil prices rose sharply to end above $70 a barrel after the US GDP report showed more signs of recovery in the US," analysts from Singapore's United Overseas Bank said in a report.
Benchmark crude for November deliver was down 72 cents at $69.89 by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange.
The contract jumped $3.90 to settle at $70.61 on Wednesday after the Energy Information Administration said US gasoline stockpiles unexpectedly dropped 1.6 million barrels last week from the previous week.
Analysts had expected a jump of 1.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The EIA also said demand for gasoline over the four weeks ended Sept 25 was 5.4% higher than last year.
"Gasoline demand continues to improve," Barclays Capital said in a report."We see the global market adjustment as remaining on track for a slow and steady soft landing for both prices and quantities.'
Barclays said it expects crude to average $76 a barrel in the fourth quarter and $85 next year.
Other inventory data was less encour-aging. Crude supplies grew more than expected last week, according to the government report, and they have now swelled to 11.4% above what they were last year.
Analysts said a multitude of US economic data to be released yesterday and today _weekly jobless claims, pending home sales, construction spending, auto sales and non-farm payroll data, among others _could push and pull on prices.'We are not ready to have a conviction in any trends,' said Olivier Jakob of Petromatrix in Switzerland. 'Further violent moves can be expected but the recent ranges are likely to remain respected."
In other Nymex trading, gasoline for November delivery fell 1.97 cents to $1.7319 a gallon, and heating oil lost 2.23 cents to $1.8101 a gallon. Natural gas retreated 7.2 cents to $4.769 per 1,000 cubic feet.
In London, Brent crude fell 77 cents to $68.30 on the ICE Futures exchange.
Also on Wednesday, energy traders digested official data that showed a jump in US crude stockpiles last week, implying stronger demand and also boosting prices.
"Oil prices rose sharply to end above $70 a barrel after the US GDP report showed more signs of recovery in the US," analysts from Singapore's United Overseas Bank said in a report.
GM pulls the plug on Saturn
General Motors Co will shut down Saturn now that a deal with former race car driver and auto dealer magnate Roger Penske has collapsed, marking the end of a brand that was supposed to revolutionise the way small cars were built and sold in America.
The deal with Penske was supposed to be finalised on Wednesday. But the unexpected end came when his company, Penske Automotive Group Inc,was unable to find a manufacturer to supply vehicles for the brand's dealerships.
GM had agreed to keep building Saturn models like the Aura, Outlook and Vue through at least 2011, but after that,Saturn would have to come up with its own products.
Penske's tentative deal buy Saturn was announced in early June.
"This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," GM CEO Fritz Henderson said.
He said Saturn and its dealership network would be phased out.
Although the sales price was never disclosed, Penske was to get Saturn's roughly 350 dealerships and promised to retain 13,000 employees.
Penske spokesman Anthony Pordon said the company had reached a tentative deal with another automaker to make cars for Saturn, but that company's board of directors rejected the agreement. He would not identify the other automaker.
Pordon said there is little if any chance that the talks could be reopened.
Without another supplier in place before the deal was signed, Penske couldn't run the risk of taking on Saturn, Pordon said.
It takes several years to design new vehicles or engineer foreign vehicles to meet US standards. Penske would risk having no products to sell once the GM contract expired.
The Saturn announcement came on the same day GM and Chrysler Group LLC met on Capitol Hill with dealers and lawmakers as talks began on the companies' plans to close around 3,000 dealerships. GM is cutting 2,400 dealerships from its 6,000-dealer network by the autumn of 2010.
Congress is weighing legislation that could force the automakers to reverse their closure decisions.
"GM will stop making Saturns as soon as possible, but no lay-offs are expected,"said spokeswoman Sherrie Childers Arb.
GM had stopped building the Aura mid-size sedan in Kansas City, Kansas,and will not resume assembling them."Production of the Outlook large crossover near Lansing, Michigan, and the Vue small crossover vehicle in Ramos Arizpe, Mexico, will be phased out as soon as possible," she said.
"Those plants produce products for other brands, and we think we can increase volume on those products that will meet market demand," Childers Arb said.
"Saturn owners can still go to Saturn dealers for service. They would also be able to go to a certified GM dealer once Saturn dealerships close," GM said.
The deal with Penske was supposed to be finalised on Wednesday. But the unexpected end came when his company, Penske Automotive Group Inc,was unable to find a manufacturer to supply vehicles for the brand's dealerships.
GM had agreed to keep building Saturn models like the Aura, Outlook and Vue through at least 2011, but after that,Saturn would have to come up with its own products.
Penske's tentative deal buy Saturn was announced in early June.
"This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," GM CEO Fritz Henderson said.
He said Saturn and its dealership network would be phased out.
Although the sales price was never disclosed, Penske was to get Saturn's roughly 350 dealerships and promised to retain 13,000 employees.
Penske spokesman Anthony Pordon said the company had reached a tentative deal with another automaker to make cars for Saturn, but that company's board of directors rejected the agreement. He would not identify the other automaker.
Pordon said there is little if any chance that the talks could be reopened.
Without another supplier in place before the deal was signed, Penske couldn't run the risk of taking on Saturn, Pordon said.
It takes several years to design new vehicles or engineer foreign vehicles to meet US standards. Penske would risk having no products to sell once the GM contract expired.
The Saturn announcement came on the same day GM and Chrysler Group LLC met on Capitol Hill with dealers and lawmakers as talks began on the companies' plans to close around 3,000 dealerships. GM is cutting 2,400 dealerships from its 6,000-dealer network by the autumn of 2010.
Congress is weighing legislation that could force the automakers to reverse their closure decisions.
"GM will stop making Saturns as soon as possible, but no lay-offs are expected,"said spokeswoman Sherrie Childers Arb.
GM had stopped building the Aura mid-size sedan in Kansas City, Kansas,and will not resume assembling them."Production of the Outlook large crossover near Lansing, Michigan, and the Vue small crossover vehicle in Ramos Arizpe, Mexico, will be phased out as soon as possible," she said.
"Those plants produce products for other brands, and we think we can increase volume on those products that will meet market demand," Childers Arb said.
"Saturn owners can still go to Saturn dealers for service. They would also be able to go to a certified GM dealer once Saturn dealerships close," GM said.
Change at the top as Chevron CEO retires
Chevron Corp said on Wednesday David O'Reilly would retire as chairman and chief executive of the second-largest US oil company at the end of the year and be replaced by vice chairman John Watson.
Watson,52, has worked at the company since 1980, including roles as chief financial officer and head of exploration and production outside North America.He also led Chevron's integration of Texaco after the transaction closed in 2001.
The California native, who currently oversees strategy and development, will take the helm at a time when oil majors face increasing competition from staterun oil companies for access to the largest untapped reserves. Two-thirds of the world's top 20 oil companies are backed by governments.
O'Reilly, a 62-year-old from Dublin,has worked for the San Ramon,California-based company for 41 years and served in the top two roles for the past decade.
While his public profile was lower than that of some other top executives,he made headlines in June by debating the head of the Sierra Club, an environmental group.
A new CEO is just the latest change at the top of Chevron in the past year, which has seen a new chief financial officer take over and the appointment of a new top inhouse lawyer.Watson: Low "The CEO public profile change is a mild positive for Chevron's stock, largely because it sets up a smooth transition," said James Halloran,consultant with Financial America Securities in Cleveland, Ohio.
But he said the road ahead "looks tough since oil companies largely occupy a second tier after national oil companies.
"They can no longer show up at the doorstep of countries and get access to the oil," Halloran said.
In the face of this challenge, Chevron in January dropped its target for 3%compound annual production growth from 2005 to 2010, although in July it did bump up its 2009 output growth target to 5 from 4%.
O'Reilly will depart as a number of sizeable projects come online from Brazil to the Gulf of Mexico to Australia, where the $37 billion Gorgon gas project just got the green light.
"He's left him with a well-stocked pond," said Fadel Gheit, analyst at Oppenheimer & Co, who also identified access to new reserves as Watson's biggest challenge.
Watson also faces a potential crisis from a $27 billion claim under a lawsuit in Ecuador, where indigenous people blame Texaco for polluting the jungle and damaging their health.
A ruling in the 16-year-old case had been due in the coming months, but that is now complicated by the judge's replacement amid allegations he was involved in a $3 million bribery plot.
Chevron's board elected George Kirkland, 59, to succeed Watson as vice chairman. Kirkland will retain responsibility for Chevron's global oil and gas exploration and production.
Watson,52, has worked at the company since 1980, including roles as chief financial officer and head of exploration and production outside North America.He also led Chevron's integration of Texaco after the transaction closed in 2001.
The California native, who currently oversees strategy and development, will take the helm at a time when oil majors face increasing competition from staterun oil companies for access to the largest untapped reserves. Two-thirds of the world's top 20 oil companies are backed by governments.
O'Reilly, a 62-year-old from Dublin,has worked for the San Ramon,California-based company for 41 years and served in the top two roles for the past decade.
While his public profile was lower than that of some other top executives,he made headlines in June by debating the head of the Sierra Club, an environmental group.
A new CEO is just the latest change at the top of Chevron in the past year, which has seen a new chief financial officer take over and the appointment of a new top inhouse lawyer.Watson: Low "The CEO public profile change is a mild positive for Chevron's stock, largely because it sets up a smooth transition," said James Halloran,consultant with Financial America Securities in Cleveland, Ohio.
But he said the road ahead "looks tough since oil companies largely occupy a second tier after national oil companies.
"They can no longer show up at the doorstep of countries and get access to the oil," Halloran said.
In the face of this challenge, Chevron in January dropped its target for 3%compound annual production growth from 2005 to 2010, although in July it did bump up its 2009 output growth target to 5 from 4%.
O'Reilly will depart as a number of sizeable projects come online from Brazil to the Gulf of Mexico to Australia, where the $37 billion Gorgon gas project just got the green light.
"He's left him with a well-stocked pond," said Fadel Gheit, analyst at Oppenheimer & Co, who also identified access to new reserves as Watson's biggest challenge.
Watson also faces a potential crisis from a $27 billion claim under a lawsuit in Ecuador, where indigenous people blame Texaco for polluting the jungle and damaging their health.
A ruling in the 16-year-old case had been due in the coming months, but that is now complicated by the judge's replacement amid allegations he was involved in a $3 million bribery plot.
Chevron's board elected George Kirkland, 59, to succeed Watson as vice chairman. Kirkland will retain responsibility for Chevron's global oil and gas exploration and production.
PTT, EGAT PLAN TO INVEST BT1.8 TRILLION
PTT Group and the Electricity Generating Authority of Thailand (Egat), both major national energy units, yesterday affirmed plans for Bt1.8 trillion of investment from 2010-2014 in order to ensure energy security.
However, they urged the government to better communicate with local communities if it wanted to see the investments proceed smoothly.
At the "Energy Solves Thailand's Crisis" seminar hosted by the Energy Ministry, PTT president and CEO Prasert Bunsumpun said his company's investment would further strengthen the country's energy security.
For absolute security, he said, PTT needed to be a world-class player with a large business size, integrated value chain, strong competitiveness and strength in good governance.
He added that since its privatisation in 2001, PTT had raced ahead in terms of its development.
"Yet, as a national energy company, PTT still needs support from the government and the general public. Otherwise, PTT would have difficulties in competing against others. Based on the earnings ratio on sale or assets, PTT is relatively small compared to competitors like ExxonMobil or Malaysia's Petronas," he said.
While PTT Exploration and Production (PTTEP) will invest Bt480 billion in the period, PTT and other subsidiaries will invest a combined Bt1 trillion - and Egat another Bt300 billion.
Prasert lamented the government's policy that required PTT to shoulder oil price subsidies worth about Bt40 billion last year. Meanwhile, PTT had to subsidise the price of liquefied petroleum gas to the tune of about Bt5 billion, which only weakened the company.
"In 2008, PTT's net profit totalled US$1.6 billion [Bt53.7 billion] and some social groups said this was too high. Yet, compared to $15 billion at Petronas or $45 billion at ExxonMobil, the profit is small. Meanwhile, PTT is responsible for seeking new energy supplies. Without profits, good governance and government support, how can PTT mobilise funds to finance the expansion?" he said.
PTTEP chief executive officer Anon Sirisaengtaksin echoed Prasert's point, saying that government support was necessary or projects could be disrupted due to high risks.
PTTEP's investment plan is aimed at ensuring sufficient supply, as Thailand's oil consumption will rise from 1.7 million barrels per day to 2.7 million in the next 10 years.
The company now supplies 260,000 barrels a day and is in the process of raising this to 400,000. It is involved in 40 exploration and production projects in 13 countries, with 20 of them under exploration.
Egat governor Sombat Sarntijaree said his agency's investment would depend on the national power development plan, which is being revised.
He said it was necessary for Thailand to diversify fuels for power generation and for the government to further educate the public on nuclear power.
Jiraphol Jirapraditkul, director-general of the Energy Policy and Planning Office, said that at present, local communities and non-government agencies were opposed to fuels like biomass, coal and nuclear.
He said the situation would pose threats to national energy security, and the government would therefore do its best to communicate with the public - or no investors would dare to commit to energy projects.
However, they urged the government to better communicate with local communities if it wanted to see the investments proceed smoothly.
At the "Energy Solves Thailand's Crisis" seminar hosted by the Energy Ministry, PTT president and CEO Prasert Bunsumpun said his company's investment would further strengthen the country's energy security.
For absolute security, he said, PTT needed to be a world-class player with a large business size, integrated value chain, strong competitiveness and strength in good governance.
He added that since its privatisation in 2001, PTT had raced ahead in terms of its development.
"Yet, as a national energy company, PTT still needs support from the government and the general public. Otherwise, PTT would have difficulties in competing against others. Based on the earnings ratio on sale or assets, PTT is relatively small compared to competitors like ExxonMobil or Malaysia's Petronas," he said.
While PTT Exploration and Production (PTTEP) will invest Bt480 billion in the period, PTT and other subsidiaries will invest a combined Bt1 trillion - and Egat another Bt300 billion.
Prasert lamented the government's policy that required PTT to shoulder oil price subsidies worth about Bt40 billion last year. Meanwhile, PTT had to subsidise the price of liquefied petroleum gas to the tune of about Bt5 billion, which only weakened the company.
"In 2008, PTT's net profit totalled US$1.6 billion [Bt53.7 billion] and some social groups said this was too high. Yet, compared to $15 billion at Petronas or $45 billion at ExxonMobil, the profit is small. Meanwhile, PTT is responsible for seeking new energy supplies. Without profits, good governance and government support, how can PTT mobilise funds to finance the expansion?" he said.
PTTEP chief executive officer Anon Sirisaengtaksin echoed Prasert's point, saying that government support was necessary or projects could be disrupted due to high risks.
PTTEP's investment plan is aimed at ensuring sufficient supply, as Thailand's oil consumption will rise from 1.7 million barrels per day to 2.7 million in the next 10 years.
The company now supplies 260,000 barrels a day and is in the process of raising this to 400,000. It is involved in 40 exploration and production projects in 13 countries, with 20 of them under exploration.
Egat governor Sombat Sarntijaree said his agency's investment would depend on the national power development plan, which is being revised.
He said it was necessary for Thailand to diversify fuels for power generation and for the government to further educate the public on nuclear power.
Jiraphol Jirapraditkul, director-general of the Energy Policy and Planning Office, said that at present, local communities and non-government agencies were opposed to fuels like biomass, coal and nuclear.
He said the situation would pose threats to national energy security, and the government would therefore do its best to communicate with the public - or no investors would dare to commit to energy projects.
Rayong appeal discussed
The country's industrial giants gathered yesterday to discuss the court-ordered suspension of permits at Map Ta Phut and whether the private sector could petition the court to relax its orders.
Led by the two largest operators at the Rayong industrial estate - PTT group and Siam Cement Group - the companies discussed possible appeals with the Federation of Thai Industries (FTI). The government is already planning an appeal.
"The private sector, particularly big companies, have asked the government if the law will allow them to file petitions to request the court to delay its ruling's effective date," FTI chairman Santi Vilassakdanont said."In the dispute though it seems to be an argument between the government and activists - the sufferer is the business sector."
The Administrative Court on Tuesday suspended operating permits for 76 projects, based on Section 67 of the 2007 Constitution, which addresses the impact of industries on community health and the environment.
The FTI urged the government to seek a long-term solution that could allow investment and environmental conservation to coexist.
PTT, its subsidiaries and joint ventures have invested more than 120 billion baht in 25 projects, of a total 76 suspended, said Prasert Bunsumpun, president and chief executive of PTT.
The group will not be hurt as much as previously predicted if PTT's projects have to be delayed to comply with the court order, as most have yet to start construction, he said.
However, PTT's sixth gas separation plant and the olefins cracker of PTT Chemical Plc are heavily affected.
As a cracker is the upstream unit for petrochemicals, related industries would be short of domestic feedstocks and would require imported materials. SCG also has ongoing investments in a naphtha cracker and downstream plants un-der construction in the area.
"The whole country will see the impact - from the construction sector,creditors, employment, stakeholders and the stock market - not only the industrial sector will suffer," Mr Prasert said."They have abided by the law since the beginning, so I don't think they will tolerate this."
Tevin Vongvanich, chief financial officer of PTT Plc, echoed Mr Prasert.
"The damage has happened already.Some projects designed to improve the environment are also affected," he said."If it becomes clear that they don't want us to expand [in Map Ta Phut]anymore, we might have to look at other locations to place our investments in the future."
Surong Bualakula, a PTT senior executive vice-president for international business, said investor confidence had been shaken.
"The message perceived by investors abroad has made them panic. They [perhaps] don't know where Map Ta Phut is but it is actually the image of the country that has been hurt," he said.
Concerned parties should look at ways some projects can go ahead along with health impact assessments (HIA),he said."We should find the balance for environmentally responsible industries to live together with communities."
According to the ministry,11 projects out of 76 received environmental impact assessment (EIA) approvals before the 2007 Constitution took effect, so these projects worth 58 billion baht need not be suspended.
The remaining 65 projects include 47 expansions and 18 new investments,worth 229 billion baht in total.
Patareeya Benjapolchai, president of the Stock Exchange of Thailand, said the exchange hoped SET-listed PTT and SCG could resolve the matter."I believe there will be a positive answer to it as the government sector is taking interest in solving the problem," she said.
The issue is expected to have an impact on foreign direct investment rather than on the foreign investors in the Thai stock market due to their diversified investment portfolios, she said.
PTT shares closed yesterday at 263 baht, up one baht, in trade worth 1.11 billion. SCC also rose one baht to 223.
Led by the two largest operators at the Rayong industrial estate - PTT group and Siam Cement Group - the companies discussed possible appeals with the Federation of Thai Industries (FTI). The government is already planning an appeal.
"The private sector, particularly big companies, have asked the government if the law will allow them to file petitions to request the court to delay its ruling's effective date," FTI chairman Santi Vilassakdanont said."In the dispute though it seems to be an argument between the government and activists - the sufferer is the business sector."
The Administrative Court on Tuesday suspended operating permits for 76 projects, based on Section 67 of the 2007 Constitution, which addresses the impact of industries on community health and the environment.
The FTI urged the government to seek a long-term solution that could allow investment and environmental conservation to coexist.
PTT, its subsidiaries and joint ventures have invested more than 120 billion baht in 25 projects, of a total 76 suspended, said Prasert Bunsumpun, president and chief executive of PTT.
The group will not be hurt as much as previously predicted if PTT's projects have to be delayed to comply with the court order, as most have yet to start construction, he said.
However, PTT's sixth gas separation plant and the olefins cracker of PTT Chemical Plc are heavily affected.
As a cracker is the upstream unit for petrochemicals, related industries would be short of domestic feedstocks and would require imported materials. SCG also has ongoing investments in a naphtha cracker and downstream plants un-der construction in the area.
"The whole country will see the impact - from the construction sector,creditors, employment, stakeholders and the stock market - not only the industrial sector will suffer," Mr Prasert said."They have abided by the law since the beginning, so I don't think they will tolerate this."
Tevin Vongvanich, chief financial officer of PTT Plc, echoed Mr Prasert.
"The damage has happened already.Some projects designed to improve the environment are also affected," he said."If it becomes clear that they don't want us to expand [in Map Ta Phut]anymore, we might have to look at other locations to place our investments in the future."
Surong Bualakula, a PTT senior executive vice-president for international business, said investor confidence had been shaken.
"The message perceived by investors abroad has made them panic. They [perhaps] don't know where Map Ta Phut is but it is actually the image of the country that has been hurt," he said.
Concerned parties should look at ways some projects can go ahead along with health impact assessments (HIA),he said."We should find the balance for environmentally responsible industries to live together with communities."
According to the ministry,11 projects out of 76 received environmental impact assessment (EIA) approvals before the 2007 Constitution took effect, so these projects worth 58 billion baht need not be suspended.
The remaining 65 projects include 47 expansions and 18 new investments,worth 229 billion baht in total.
Patareeya Benjapolchai, president of the Stock Exchange of Thailand, said the exchange hoped SET-listed PTT and SCG could resolve the matter."I believe there will be a positive answer to it as the government sector is taking interest in solving the problem," she said.
The issue is expected to have an impact on foreign direct investment rather than on the foreign investors in the Thai stock market due to their diversified investment portfolios, she said.
PTT shares closed yesterday at 263 baht, up one baht, in trade worth 1.11 billion. SCC also rose one baht to 223.
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