Channel 0109 Oil | Gas

Thai bourse lists Indorama Ventures on February 5

2010-02-07T05:00:00.001-08:00

Indorama Ventures PCL will list and commence trading on February 5. It is the first company to list on the Thai bourse this year, with a market capitalization at its initial public offering (IPO) price of over THB44.00 billion (approx. USD1.33 billion). The company will be in the Industrials Group, Petrochemical & Chemicals Sector, using “IVL” as its trading symbol, and comes from restructuring shareholdings of the business group.

“This listing of IVL supports SET’s strategy in 2010 to encourage large companies to list. SET aims at increasing its market capitalization by THB100 billion (approx. USD3.02 billion) from new listings this year,” revealed SET Chief Marketing Officer, Issuer & Listing Vichate Tantiwanich.

IVL is the holding company of domestic and international firms involved in integrated petrochemical products. These companies have 13 production facilities in five countries worldwide and manufacture and/or distribute polyester fiber and yarn, with highest production capacity in the country, and polyethylene terephthalate (“PET”), with the world’s second largest production capacity.

IVL has a total paid-up registered capital of THB4.33 billion (approx. USD130.74 million), with a par value of THB1.00 each, consisting of 3,352 million existing common shares and 583 million capital increase shares to exchange with shares held by Indorama Polymers PCL (IRP)’s retail investors at 1 IRP share for 1.4150 IVL share. At its IPO on January 25-27, 2010, IVL offered 400 million shares and 60 million Green shoe option shares, or a total of 460 million shares, to the general public at THB10.20 per share. The funds raised will be used for debt repayment and general operations, including as working capital. Bualuang Securities PCL was its financial advisor and underwriter.

The IPO price of THB10.20 per share came from book-building process among institutional investors. IVL’s dividend payment policy is to pay out no less than 30% of profit after taxes and legal reserves.

For more information about Indorama Ventures PCL, please see the company’s prospectus at the Securities and Exchange Commission (SEC) at www.sec.or.th and for general information at www.indoramaventures.com, and www.set.or.th.

Fitch: APAC Oil & Gas Credit Quality To Remain Broadly Stable

2010-02-05T23:10:00.001-08:00

Fitch Ratings has said today, in its "Asia-Pacific Oil & Gas: Credit Outlook 2010" report, that the overall credit outlook for the sector is broadly stable, although the outlook for some refiners remains negative.

"Most exploration & production (E&P) and integrated companies have significant headroom at their rating levels," says Steve Durose, head of Fitch's Asia-Pacific Energy & Utilities team. "Major investments to boost reserves and production, either organically or through acquisitions, are therefore not expected to exert any significant downward pressure on their ratings," adds Mr. Durose.

Whilst upstream oil businesses' cash flows can be unpredictable due to their dependence on volatile international oil prices, Fitch rates through the economic cycle and therefore does not upgrade during periods of high oil prices and downgrade when prices fall. Fitch expects that 2010's oil prices will benefit from inflationary expectations and the significant amount of liquidity being injected into the global financial markets. Therefore, the agency broadly expects operating cash flows to increase for upstream and integrated oil companies. However, Fitch does not expect balance sheets to strengthen significantly as any additional cash generated is likely to be spent on investment.

"On the other hand, downstream refiners will generally continue to face industry-wide capacity surplus, constraining utilisation and margins," adds Mr. Durose. Furthermore, the creditworthiness of some downstream Asia-Pacific oil and gas companies continues to be constrained by the obligation to supply refined products at prices which are subject to political influence rather than economically cost-reflective. If crude prices rise significantly above current levels for a sustained period, this risk will become more acute.

The ratings of many of the region's oil and gas companies are supported by their close legal, operational and strategic ties with respective government owners. Fitch does not expect the implied or actual government support for any of these companies to weaken in 2010.

RAINBOW CNG AND THE FLY II DDF SYSTEM

2010-01-30T01:37:00.001-08:00

Over the past year, Rainbow CNG has been assiduously testing a DDF system that would enable to optimize the performance of Diesel engines without invasion.

Our engineer, Mr. Attilio Guidetti, has been instrumental in developing the electronics with which this system can run.

The Diesel Dual fuel System allows an amount of gas to be injected into the engine through the air intake manifold. This improves the rate at which the engine burns fuel, and this translates into a better performance and/or a saving of fuel.

The DDF can be used with either CNG or LPG gas. Using the CNG gas obviously has a better environmental impact.

Starting in February 2009, Rainbow CNG together with Rainbow Fuel Energy Solutions Inc. first tested the system on some of the Jeepneys crowding the streets of Metro Manila. The Jeepneys with Isuzu C240 engine were found to be running 30% smoother and with noticeably improved engine performance. The production of black engine exhaust smoke was significantly reduced.

The testing has continued over a variety of vehicles in Thailand, from pick ups to cars to minivans. The system was tested successfully on Mercedes MD140 2.9 Vip Van finding that the range of fuel saving with CNG went from 45 % to 48%. and pick up Mitsubishi Strada 2.8 D, finding that the range of fuel saving with LPG went from 30 % to 35%.

Together with Engine Expert Enterprise of Malaysia, a successful test was also carried out on a truck Nissan lorry CD45, 20 ton, finding that the overall saving on Diesel consumption was of more than 40%.
THE CONVERTED NISSAN LORRY ON ROAD TEST

The great advantage of the DDF system is that it allows the vehicle operator the flexibility of using two fuels, can gain both economically and environmentally from this and can revert completely to diesel, which is a bonus in terms of the resale value of the vehicle.

The above graph depicts the flexibility of the system. The configuration can be easily adapted to the customer’s needs and driving style. The customer can decide at which level of RPM he wishes to inject gas into the system and get increased power or savings.

The second graph shows the increase of the torque and consequently the increase in power of the diesel engine in gas configuration.

PTT Chemical and GE sign gas turbine service agreement

2010-01-30T01:09:00.001-08:00

PTT Chemical Public Company Limited, Thailand’s largest chemical producer and a regional leader in the petrochemical industry, has signed a service agreement with GE (NYSE: GE) in Singapore to ensure the long-term reliability of nine GE gas turbines at PTT Chemical’s site in Map Ta Phut Industrial Estate, Rayong Province, Thailand.

The 13-year Contractual Service Agreement (CSA) worth US$46.1 million or approximately Baht 1,521 million covers the supply of parts, repairs and field services for planned and unplanned outages for gas turbine-generators and accessory equipment, along with performance guarantees.

Veerasak Kositpaisal, President and CEO of PTT Chemical said, “Through this agreement, GE guarantees the continuing reliability and efficiency of the gas turbines, which improves our efficiency and security as well as enables us to maintain our petrochemical production schedule. The CSA also helps us to effectively manage our maintenance budget over the life of the agreement.”

“While we have received equipment orders from PTT Chemical in the past, this marks our first CSA with the company,” said Kovit Kantapasara., GE Energy Country Executive for Thailand and Indochina. “We hope to build on this agreement to provide similar services to other companies in the PTT Group.” Overall, GE has supplied more than 20 gas turbines to the petrochemical business of the PTT Group.

PTT Chemical is a diversified and integrated chemical producer offering a wide variety of petrochemical and chemical products. Its product portfolio includes ethylene and propylene, collectively called olefins, downstream derivatives such as Polymers and Ethylene Oxide and Ethylene Glycol, and oleochemicals. The company’s gas-based plants have a total annual capacity of 2,888,000 tons of olefins, making it Thailand’s largest olefins producer and the second largest in all of Asia.

GE is a diversified global infrastructure, finance and media company that's built to meet essential world needs. GE Energy is one of the world’s leading suppliers of power generation and energy delivery technologies providing integrated product and service solutions in all areas of the energy industry including coal, oil, natural gas and nuclear energy; renewable resources such as water, wind, solar and biogas; and other alternative fuels.

ETIHAD TO JOIN SUSTAINABLE AVIATION FUEL USERS GROUP

2009-12-15T19:25:00.001-08:00

Etihad Airways has joined the Sustainable Aviation Fuel Users Group (SAFUG), an airline-led industry working group established in 2008 to accelerate the commercialisation and availability of sustainable biofuels.

James Hogan, Etihad Airways’ chief executive, said: ““Etihad recognises the need for step-changes in aviation to reduce our reliance on fossil fuels and meet our industry’s carbon reduction goal. We also recognise that any fuel alternatives must be morally, socially and environmentally acceptable, while not compromising the future sustainability of the aviation industry.”

SAFUG members are bound by stringent criteria for the development of non fossil fuels, including the following:

The development of plant sources must be undertaken in a manner that is non-competitive with food, with biodiversity impacts minimised and without jeopardizing drinking water supplies. The total lifecycle greenhouse gas emissions from plant growth, harvesting, processing and end-use should be significantly less than that from fossil sources. In developing economies, development projects should include provisions or outcomes that improve socio-economic conditions for small-scale farmers and their families and that do not require the involuntary displacement of local populations. High conservation value areas and native eco-systems should not be cleared and converted for jet fuel plant source development.

Each SAFUG member has pledged to work through the Roundtable for Sustainable Biofuels (RSB), a global multi-stakeholder initiative consisting of leading environmental organizations, financiers, biofuel developers, biofuel-interested petroleum companies, the transportation sector, developing-world poverty alleviation associations, research entities, and governments.

“Abu Dhabi, our home base, has itself made a strong commitment towards sustainability and in the promotion of renewable energy through the establishment of Masdar City, which will the headquarters of the International Renewable Energy Agency,” Mr Hogan said.
About Etihad Airways

Etihad Airways is the national airline of the United Arab Emirates based in the UAE’s capital, Abu Dhabi. Currently Etihad offers flights to over 55 destinations in the Middle East, Europe, North America, Africa and Asia.

ROLLS-ROYCE POWERS MAJOR GAS PIPELINES IN CHINA

2009-12-15T05:19:00.000-08:00

Rolls-Royce, the global power systems company, has won two additional major contracts from PetroChina for power systems to be installed on the West to East Gas Pipeline Project (WEPP).

The contracts include extension of Rolls-Royce involvement in the initial WEPP Line 1 and the Western section of Line 2, a second West to East pipeline currently under construction. Total value of the orders exceeds $120 million.

Three RB211-powered gas compressor packages and a single motor-driven compressor have been ordered for Line 1 of the WEPP pipeline to increase installed horsepower at various stations along the pipeline. Crossing ten Chinese provinces from the West Gobi desert to Shanghai in the East, this 4,000 km line has a capacity of 17 billion cubic meters (bcm) of natural gas per year.

In addition, six RB211 compressor packages have been ordered for the 2,450 km Western section of Line 2, which is being constructed to transport gas from the Chinese border with Kazakhstan in the West to Zhongwei, the intersection point between the regions of Ningxia, Gansu and Inner Mongolia. When completed and fully operational, this line is designed to have a capacity of 30 bcm of natural gas per year, which is broadly equivalent to the current annual domestic consumption of natural gas in the UK.

Tony Ruegger, Vice-President – Oil & Gas for the Rolls-Royce energy business, said: “We are very pleased to once again be selected by PetroChina to provide Rolls-Royce power and compression equipment for their growing pipeline network.

”These latest orders emphasize the increasing success of Rolls-Royce equipment and expertise in China, one of the world’s most important energy markets.”

The new contracts increase the number of RB211 gas turbine packages ordered for the original WEPP line to19 and the number of motor-driven units to six. Fifteen RB211 sets and five motor-driven compressors are already in operation, and an additional RB211 set is currently undergoing installation. Total operating experience now exceeds a quarter of a million hours, with one engine installed at station one, Lunnan, Xinjiang Province, having recorded over 23,000 hours.

The gas compressors for all nine newly-ordered gas turbine packages plus the single motor drive unit will be model RFBB-36, also designed and manufactured by Rolls-Royce.

The RB211 gas generators will be manufactured at the company’s Montreal facility in Canada while packaging of the units and the manufacture of the compressors will take place in Mount Vernon, Ohio. All the equipment for WEPP Line 1 is scheduled for delivery in the first quarter of 2010 with the six packages for Line 2 due in the second quarter of 2010.

Rolls-Royce has 26 RB211 gas turbines currently operating in and around the Gulf of Thailand.

Thailand Inaugurates First Private NGV Mother Station

2009-12-15T05:17:00.001-08:00

9 November 2009 – H.E. Dr. Wannarut Channukul, Minister of Energy, today inaugurated Thailand’s first NGV mother station under private investment. Located at Tambon Chiang Rak Noi, Amphoe Sam Khok, Pathum Thani province, the station is operated by Sakol Energy Co., Ltd., which pioneers NGV distribution on behalf of PTT Plc.

The minister of energy said that with the spiraling NGV demand, PTT had been expanding the capacity of existing mother stations while securing land for additional mother stations to meet the public demand for the increasingly popular fuel. At the same time, the ministry had supported PTT’s invitation for private investment in new mother stations to add to PTT’s tally and raise NGV supply. With a distribution capacity of 250 tons/day, Sakol Energy’s station is Thailand’s first private NGV mother station, supplementing PTT’s distribution capacity and transmission volume for 19 daughter stations in Bangkok, Nonthaburi, Pathum Thani, and Ayutthaya.

Mr. Prasert Bunsumpun, PTT’s Chief Executive Officer and President, added that the private sector’s acceptance of PTT’s invitation to set up mother stations is regarded as a milestone step for private participation in NGV business development. For this would not only raise PTT’s own efficiency of promoting NGV in the transport sector, but also ease motorists’ NGV refueling queues. Today, PTT commands a total of 18 mother stations, which supply the fuel to daughter stations nationwide with a total distribution capacity of 3,600 tons/day. Combined with the distribution capacity of its 78 conventional stations, its total capacity now stands at 7,750 tons/day. The national oil company’s current NGV sales volume amounts to about 3,900 tons/day. Currently, there are 358 NGV stations operating nationwide. According to the plan, PTT targets to increase the number of NGV stations by the end of this year.

Exxon Mobil Corporation and XTO Energy Inc. Announce Agreement

2009-12-15T05:05:00.000-08:00

Exxon Mobil Corporation (NYSE: XOM) and XTO Energy Inc. announced today an all-stock transaction valued at $41 billion. The agreement, which is subject to XTO stockholder approval and regulatory clearance, will enhance ExxonMobil’s position in the development of unconventional natural gas and oil resources.

Under the terms of the agreement, approved by the boards of directors of both companies, ExxonMobil has agreed to issue 0.7098 common shares for each common share of XTO. This represents a 25 percent premium to XTO stockholders. The transaction value includes $10 billion of existing XTO debt and is based on the closing share prices of ExxonMobil and XTO on December 11, 2009.

“We are pleased that ExxonMobil and XTO have reached this agreement,” said Rex W. Tillerson, chairman and chief executive officer of Exxon Mobil Corporation.

“XTO is a leading U.S. unconventional natural gas producer, with an outstanding resource base, strong technical expertise and highly skilled employees. XTO’s strengths, together with ExxonMobil’s advanced R&D and operational capabilities, global scale and financial capacity, should enable development of additional supplies of unconventional oil and gas resources, benefiting consumers both here in the United States and around the world.”

Tillerson said the agreement is good news for the United States economy and energy security, as it will enhance opportunities for job creation and investment in the production of America’s own clean-burning natural gas resources.

XTO’s resource base is the equivalent of 45 trillion cubic feet of gas and includes shale gas, tight gas, coal bed methane and shale oil. These will complement ExxonMobil’s holdings in the United States, Canada, Germany, Poland, Hungary and Argentina.

Following the transaction closing, ExxonMobil intends to establish a new upstream organization to manage global development and production of unconventional resources, enabling the rapid development and deployment of technologies and operating practices to increase production and maximize resource value. The new organization will be located in Fort Worth, Texas, in XTO’s current offices.

Bob R. Simpson, chairman and founder of XTO, said that over the company’s 23-year history, XTO has developed technical expertise and has assembled a substantial, high-quality and diverse resource base in producing basins across the United States.

“XTO has a proven ability to profitably and consistently grow production and reserves in unconventional resources,” said Simpson. “As the world’s leading energy company, ExxonMobil will build on our success and open new opportunities for the development of natural gas and oil resources on a global basis.”

Tillerson said the agreement is part of an ongoing, disciplined evaluation of timely investment opportunities to create value for shareholders, and to help meet long-term global energy demand growth. The agreement is consistent with ExxonMobil’s business model which is focused on sustainable, long-term value creation.

Completion of the transaction is expected in the second quarter of 2010. In connection with the transaction, J.P. Morgan Securities Inc. are acting as financial advisors to ExxonMobil and Barclays Capital Inc. and Jefferies & Company Inc. are acting as financial advisors to XTO.
Media Conference Call Information
ExxonMobil and XTO will be conducting a media conference call on Monday,
December 14, 2009 at 9 a.m. Eastern time (8 a.m. Central).
Participant Numbers
Domestic: 866-719-0110
International: 719-325-2212
Confirmation Code: 8522824
Analyst Conference Call Information

ExxonMobil will be conducting an analyst conference call on Monday, December 14, 2009 at 11 a.m. Eastern time (10 a.m. Central) to discuss the transaction (URL will be available at www.exxonmobil.com).

The slides to be discussed during the call will be available on exxonmobil.com for viewing and download starting at 10:45 a.m. Eastern time (9:45 a.m. Central).
Audio Webcast Participation
Listen Only Numbers:
Domestic: 877-208-2391
International: 816-581-1736
Confirmation Code: 4605791
Replay telephone numbers: 888-203-1112 or 719-457-0820
Confirmation Code: 4605791

Replay available starting at 5 p.m. Eastern (4 p.m. Central), and running through December 21 at Midnight.
About ExxonMobil

ExxonMobil, the largest publicly traded international oil and gas company, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is the largest refiner and marketer of petroleum products, and its chemical company is one of the largest in the world. For more information, visit www.exxonmobil.com.
About XTO

XTO is a domestic oil and natural gas producer engaged in the acquisition, exploitation and development of quality, long-lived oil and natural gas properties in the United States. Its properties are concentrated in Texas, New Mexico, North Dakota, Pennsylvania, West Virginia, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Utah, Louisiana and Montana. For more information, visit www.xtoenergy.com.
Important Information For Investors And Stockholders

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. ExxonMobil will file with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 that will include a proxy statement of XTO that also constitutes a prospectus of ExxonMobil. ExxonMobil and XTO also plan to file other documents with the SEC regarding the proposed agreement. A definitive proxy

statement/prospectus will be mailed to stockholders of XTO. INVESTORS AND SECURITY HOLDERS OF XTO ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and stockholders will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about ExxonMobil and XTO, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by ExxonMobil will be available free of charge on ExxonMobil’s internet website at www.exxonmobil.com under the tab "investors" and then under the tab "SEC Filings" or by contacting ExxonMobil’s Investor Relations Department at 972-444-1156. Copies of the documents filed with the SEC by XTO will be available free of charge on XTO’s internet website at www.xtoenergy.com under the tab "Investor Relations" and then under the tab "SEC Filings" or by contacting XTO’s Investor Relations Department at 817-870-2800.

ExxonMobil, XTO, their respective directors and certain of their executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of XTO in connection with the proposed transaction. Information about the directors and executive officers of XTO is set forth in its proxy statement for its 2009 annual meeting of stockholders, which was filed with the SEC on April 17, 2009. Information about the directors and executive officers of ExxonMobil is

set forth in its proxy statement for its 2009 annual meeting of stockholders, which was filed with the SEC on April 13, 2009. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Cautionary Statement Regarding Forward-Looking Statements

Statements in this document relating to future plans, projections, events or conditions are forward-looking statements. Actual results could differ materially as a result of a variety of risks and uncertainties, including: the timing to consummate the proposed agreement; the risk that a condition to closing of the proposed agreement may not be satisfied; the risk that a regulatory approval that

may be required for the proposed agreement is not obtained or is obtained subject to conditions that are not anticipated; ExxonMobil’s ability to achieve the synergies and value creation contemplated by the proposed agreement; ExxonMobil’s ability to promptly and effectively integrate XTO’s businesses; and the diversion of management time on agreement-related issues. Other factors that could materially affect ExxonMobil’s and XTO’s actual results, including project plans, costs, timing, and capacities; capital and exploration expenditures; and share purchase levels, include: changes in long-term oil or gas prices or other market or economic conditions affecting the oil and gas industry; completion of repair projects as planned; unforeseen technical difficulties; political events or disturbances; reservoir performance; the outcome of commercial negotiations; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other

factors discussed under the heading “Factors Affecting Future Results” available through the "investors" section on ExxonMobil’s website, in Item 1A of ExxonMobil's 2008 Form 10-K and in Item 1A of XTO's 2008 Form 10-K. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of ExxonMobil or XTO. Neither ExxonMobil nor XTO

assumes any duty to update these statements as of any future date. References to quantities of oil or natural gas may include amounts that ExxonMobil or XTO believe will ultimately be produced, but that are not yet classified as “proved reserves” under SEC definitions.

“INDORAMA VENTURES” SUBMITS FILING FOR EXCHANGE OFFER TO BUY IRP SHARES

2009-12-07T13:43:00.003-08:00

Petrochemical producer Indorama Ventures Public Company Limited (IVL) has filed a registration statement and draft prospectus (the “Filing”) with the Office of the Securities and Exchange Commission (SEC) to offer IVL newly issued ordinary shares in exchange for shares of its subsidiary Indorama Polymers Public Company Limited (IRP) held by minorities of IRP shareholders.

The move is part of IVL’s shareholding and management restructuring plan, a significant step in preparation for being listed on the Stock Exchange of Thailand (SET). Bualuang Securities Public Company Limited is a financial advisor to IVL.

Under the shareholding and management restructuring plan, in preparation for initial public offering (IPO) and SET listing scheduled for early 2010. Concurrently, IVL will undertake the shareholding structuring between IVL and IRP. Once approved or waivers has been granted by concerned agencies, IVL will conduct a tender offer to exchange its newly issued ordinary shares for all IRP’s shares held by IRP minority shareholders. IRP will be subsequently delisted from the SET on the same day that IVL starts to trade its shares (including those under the tender offer and IPO) on the SET. IRP minority shareholders who accept the tender offer will be able to trade their shares simultaneously with IVL’s newly issued shares on the first trading date of IVL shares on the SET.

According to the shareholding and management restructuring plan, IVL will offer its newly issued ordinary shares as a consideration to IRP minority shareholders who accept the tender offer at a rate of 1.2320 IVL (Bt1 par value) shares for each IRP share (Bt1 par value) with no cash alternative. The total IRP shares that IVL will make a tender offer for are 424.48 million shares, accounting for 30.71 percent of total IRP’s paid-up shares. Such shareholding and management restructuring plan was approved by IRP extraordinary shareholders’ meeting on 27 October 2009.

IVL believes that the new shareholding structure will increase IVL’s transparency and eliminate any potential conflict of interest between IVL and IRP after IVL’s listing. In addition, IVL believes that the current minority shareholders of IRP will enjoy benefits from IVL’s integrated petrochemical value chain business through investments in its subsidiaries.
Editor’s note:

The information contained herein is not for publication or distribution, directly or indirectly, in or into the United States of America. The materials do not constitute an offer of securities for sale in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. There is no intention to register any portion of the offering in the United States of America or to conduct a public offering of securities in the United States of America.

The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration exemption from registration or qualification under the securities laws of any such jurisdiction.

CLSA appoints Head of Sales Trading in Thailand and strengthens sales offering, after sweeping 2009 Asiamoney Poll

2009-12-07T13:43:00.001-08:00

CLSA Asia-Pacific Markets, Asia's leading independent brokerage and investment group, has followed its impressive showing in Asiamoney’s annual Brokers Poll with the hire of two industry veterans to further augment the company’s sales and sales trading capabilities.

Michael Frost joins as Head of Sales Trading in Thailand, and institutional sales specialist Lilly Kulvanichpisit brings 17 years of experience to its sales team, both hires represent CLSA’s commitment to expansion in the country and ensuring excellence in execution and client management.

On his decision to join CLSA, Frost said, “CLSA's global reputation for dynamic sales trading, unparalleled product and unmatched growth is what attracted me to the firm. I’m excited to be part of the team."

The growing of the sales team comes just days after Asiamoney’s annual Brokers Poll results were published, with CLSA again voted Thailand’s top brokerage by global fund managers.

CLSA clearly leads Thailand for its research coverage, retaining the top position in Thailand for country research (No.1 in 2008), with CLSA Head of Research Andrew Stotz again ranking Thailand’s No.1 equity analyst (No.1 in 2008).

In addition to being recognised for its leading research, CLSA’s sales services and execution was named the best in Thailand, with the brokerage taking the No.1 place for Best Overall Sales Services for the third consecutive year, and Best in Sales Trading and Best Overall Execution for the second consecutive year respectively.

CLSA also took out the title of Most Improved Brokerage in the last 12 months for the second year running.

CLSA Thailand Country Head, Pekka Johnson, said the new hires were only going to strengthen the sales offering of CLSA Thailand, with both Frost and Kulvanichpisit bringing broad industry and market knowledge and expertise to the table.

“CLSA Thailand’s priority is offering our clients the absolute best in accurate analysis and unrivalled service, and we are committed to upholding the exceptional standards which they have come to expect.”

“I am delighted to welcome Frost and Kulvanichpisit to our team, and look forward to the contribution and enhancement they will offer.”

“The poll rankings are a reflection of a job well done by all at CLSA Thailand, and we intend to carry this momentum forward and continue our expansion into the coming year,” said Johnson.
About Michael Frost

Frost has spent the majority of the last decade in Asia having completed stints in both Bangkok and Singapore, where he was most recently working as Head of South East Asian Sales Trading at ICAP, before which he spent three years at Merrill Lynch as a Director of Sales Trading.

Frost not only brings with him extensive industry experience, but also energy, enthusiasm and leadership finesse that is sure to reinforce the already stellar performance of CLSA Thailand’s sales trading team.
He commenced his new role with CLSA Thailand on 23 November, 2009.
About Lilly Kulvanichpisit

Prior to accepting her role with CLSA Thailand, Kulvanichpisit was with Asia Plus Securities, where she served as Marketing Director since 2002. Prior to this she was with WI Carr, KGI Securities and Merrill Lynch in Institutional Sales.
Kulvanichpisit will start her new role in early December, 2009.
About CLSA Thailand

CLSA is one of the longest standing foreign brokers operating in Thailand and has been serving domestic and international fund managers from Bangkok since 1989.

CLSA Securities Thailand is a full member of the Stock Exchange of Thailand (“SET”) and in 2008 co-hosted with SET Thailand Focus, an investment forum for foreign and domestic Thai investors.

A dedicated team of award-winning analysts covers more than 40 Thai companies in the agribusiness, conglomerates, consumer, financials, healthcare, industrials, media, petrochemicals, oil and gas, property, telecoms and transport sectors.
About CLSA Asia-Pacific Markets

CLSA Asia-Pacific Markets is Asia’s leading, independent brokerage and investment group. The company provides equity broking, capital markets, merger and acquisition, and asset management services to global corporate and institutional clients.

Renowned for service excellence, product innovation and award-winning market intelligence, CLSA has built its reputation on unrivalled equity research and economic analysis which is consistently ranked the best in Asia.

CLSA is one of Asia’s largest independent equity brokers and one of the world’s largest agency brokers. The group’s investment banking services include M&A advisory, equity transactions and public offerings. Alternative asset management is offered through ten Asia-based funds under CLSA Capital Partners.

Founded in 1986 and headquartered in Hong Kong, CLSA has 1,350 dedicated professionals located in 15 Asian cities, plus Dubai, London, Port Louis (Mauritius) and New York. CLSA’s major shareholder is France's Credit Agricole, which merged in 2003 with Credit Lyonnais. CLSA enjoys substantial staff ownership which contributes to its independent stance and operations.

TRIS Rating Affirms Company Rating of “BCP” at “BBB+/Positive” and Affirms Issue Rating of “SIAMDR” at “AA/Stable”

2009-12-07T13:42:00.001-08:00

TRIS Rating Co., Ltd. has affirmed the company rating of The Bangchak Petroleum PLC (BCP) at “BBB+” with “positive” outlook. The rating reflects BCP’s satisfactory refinery operations, strengthened balance sheet, and integration and support from PTT PLC (PTT). The rating also takes into consideration the fluctuations in oil prices and gross refining margins as well as declining demand for refined petroleum products.

The “positive” outlook reflects the expectation that BCP’s new cracking unit will alleviate the existing refinery limitations and yield more high-value refined products. The flexibility in operating two crude distillation unit (CDU) trains will enable BCP to capture new opportunities to maximize gross refining margin and help BCP weather the down cycles of the refining business.

TRIS Rating reported that BCP was established in 1985 and listed on the Stock Exchange of Thailand (SET) in 1993. The company owns and operates an oil refinery located in Bangkok with a capacity of 120 thousand barrels per day (KBD). The company also operates approximately 1,000 service stations under the “Bangchak” brand. After a capital increase in May 2006, PTT became the major shareholder of BCP. As of April 2009, PTT held 29.7% of BCP, the Ministry of Finance (MOF) held 11.2%, and the remaining 59.1% was held by the public. As a simple refinery, BCP produces a higher portion of fuel oil, which is a lower-value product, than a complex refinery. The average product mix during 2005 to 2009 was diesel (35%), fuel oil (32%), gasoline (17%) and other refined products (16%).

TRIS Rating said about BCP’s operating performance that it has continuously improved. The refinery utilization rate increased from 48% in 2006 to 69% for the first half of 2009 as the company has been able to export premium-grade fuel oil to China and Japan. Cheaper domestic crude now makes up a larger portion of stock feed needs. Higher selling prices for premium-grade fuel oil plus a substantial gain from hedging pushed BCP’s total gross refining margin (GRM) to US$13.08 per barrel for the first half of 2009. The marketing margin of BCP improved continually in the second half of 2008 through the first half of 2009, after recording a negative margin in the first half of 2008. BCP could adjust retail prices in line with changes in the ex-refinery prices, resulting in a favorable marketing margin of Bt0.64 per liter in the first half of 2009. Combining the refining and marketing businesses, earnings before interest, tax, depreciation and amortization (EBITDA) improved to Bt7,094 million in the first half of 2009 from Bt4,384 million in first half of 2008.

The product quality improvement (PQI) project will enhance BCP’s refinery performance and gross refining margin. The refinery will be able to process more varieties of crude, especially heavy and sour crude. The proportion of gasoline and middle distillates is expected to increase from the existing level of 64% to 82%. In addition, two trains of CDU, operating at 80 KBD and 40 KBD, may enhance gross refining margin. The CDU with 80 KBD of capacity may be utilized as a complex refinery to maximize the amount of gasoline and middle distillates produced. The other CDU may operate as a simple refinery to produce very low sulfur fuel oil (FOVS) for export.

TRIS Rating said, BCP’s capital structure remained healthy, with a debt to capitalization ratio of 42.5% as of June 2009. The construction of the cracking unit and the bio-diesel plant have been completed and will be ready for the Commercial Operation Date (COD) in late 2009. BCP’s capital expenditures in the coming years will be moderate and the debt to capitalization ratio is expected to maintain at 40%-45%.

TRIS Rating sees the global economic slowdown has reduced demand for refined petroleum products. New refining capacity in the Asia-Pacific region during 2009-2011 would possibly lead to a regional over-supply situation and, in turn, put more pressure on gross refining margin.

At the same time, TRIS Rating has also affirmed the “AA” rating with “stable” outlook for the Bt4,000 million in depository receipts on BCP’s subordinated convertible debentures (BCP141A) issued by Siam DR Co., Ltd. (SIAMDR). The rating reflects the credit support, in terms of principal protection, provided by the Ministry of Finance (MOF) to buy back the issue at the original offering price should BCP be unable to make the scheduled payments on time. The rating also reflects the additional security elements embedded in the transaction structure and the credit quality of the underlying issuer, BCP. The “stable” outlook for the depository receipts is derived from the principal protection provided by the MOF and the credit quality of BCP.

Thailand Inaugurates First Private NGV Mother Station

2009-11-19T05:55:00.000-08:00

H.E. Dr. Wannarut Channukul, Minister of Energy, today inaugurated Thailand’s first NGV mother station under private investment. Located at Tambon Chiang Rak Noi, Amphoe Sam Khok, Pathum Thani province, the station is operated by Sakol Energy Co., Ltd., which pioneers NGV distribution on behalf of PTT Plc.

The minister of energy said that with the spiraling NGV demand, PTT had been expanding the capacity of existing mother stations while securing land for additional mother stations to meet the public demand for the increasingly popular fuel. At the same time, the ministry had supported PTT’s invitation for private investment in new mother stations to add to PTT’s tally and raise NGV supply. With a distribution capacity of 250 tons/day, Sakol Energy’s station is Thailand’s first private NGV mother station, supplementing PTT’s distribution capacity and transmission volume for 19 daughter stations in Bangkok, Nonthaburi, Pathum Thani, and Ayutthaya.

Mr. Prasert Bunsumpun, PTT’s Chief Executive Officer and President, added that the private sector’s acceptance of PTT’s invitation to set up mother stations is regarded as a milestone step for private participation in NGV business development. For this would not only raise PTT’s own efficiency of promoting NGV in the transport sector, but also ease motorists’ NGV refueling queues. Today, PTT commands a total of 18 mother stations, which supply the fuel to daughter stations nationwide with a total distribution capacity of 3,600 tons/day. Combined with the distribution capacity of its 78 conventional stations, its total capacity now stands at 7,750 tons/day. The national oil company’s current NGV sales volume amounts to about 3,900 tons/day. Currently, there are 358 NGV stations operating nationwide. According to the plan, PTT targets to increase the number of NGV stations by the end of this year.

PTTCH raises revenue goal to B150bn

2009-11-12T22:19:00.000-08:00

       PTT Chemical Plc, the country's largest olefins maker, has increased its revenue forecast next year to 150 billion baht from an earlier estimate of 120 billion,said Veerasak Kositpaisal, president and CEO.
       The revision is due mainly to petrochemical product prices rising to US$1,200 per tonne, higher than its earlier prediction of $800 to $900 a tonne.It also expects average crude prices will not exceed $80 per barrel.
       The company will also have additional polymer production plants and an extra 1 million tonnes of olefins from a new cracking unit that will start operation in the first quarter of next year.
       The new plants will gradually start producing 400,000 tonnes of linear lowdensity polyethylene, 300,000 tonnes of low-density polyethylene and 500,000 tonnes of high-density polyethylene.
       "Luckily, these new plants are not included in the 76 affected projects suspended by the court in Map Ta Phut, so they can go on as scheduled," he said.
       Despite a new polymer plant opening in the Middle East, which will add more than 5 million tonnes to the market next year, a revived regional economy should absorb the new supply, he said.
       PTTCH signed a memorandum of understanding yesterday with SMC Cor-poration Ltd, a local moulding machinery producer, in a bid to co-develop high-efficiency plastic pallets.
       The partners will co-develop plastic products to better serve demand and seek ways to cut losses in the production process.
       "Using their plastic moulding machinery will accelerate the development of products to meet our clients' requirements," said Mr Veerasak.
       "Instead of starting a price war during fierce competition, research and development is a better option for sustainable business development."
       PTTCH reported lower third-quarter sales by 1% to 23.46 billion baht from 23.64 billion a year earlier, while net profit decreased 43% to 2.82 billion (1.88 baht a share) from 4.92 billion baht (3.29 baht a share) in line with sliding petrochemical prices.
       For the nine-month period, net profit was 4.56 billion baht (3.05 baht a share),a drop from 15.92 billion (10.94 baht a share) in the same period last year.Despite the decline, its shares only dropped 75 satang to 72.5 baht yesterday in trade worth 448.38 million.
       PTTCH's parent company, PTT Plc,reported a 5% drop in its third-quarter net profit to 16.99 billion baht, in line with forecasts, due to lower contributions from its exploration and refinery businesses.
       Nine-month consolidated net profit was 44.37 billion baht (15.69 baht a share), a decline of 40% from 73.9 billion (26.21 baht a share) in the same period last year.
       Results in the fourth quarter are expected to be hit by lower earnings from subsidiary PTTEP due to an oil leak at Montara field near Australia, analysts said. Next year's outlook will also depend partly on how the government resolves the dispute over the Map Ta Phut industrial estate, where the PTT Group is a major investor.
       Shares of PTT closed yesterday at 250 baht, up two baht, in trade worth 1.73 billion baht, while PTTEP closed at 144 baht, up 4.5 baht, in trade worth 1.8 billion baht.

PTT searches for NGV station partners

2009-11-12T22:18:00.000-08:00

       Energy conglomerate PTT Plc still hopes private partners will join its investment in NGV service stations.
       A massive 9 billion baht is required for investment even though NGV (natural gas for vehicles) demand is slowing, said chief executive Prasert Bunsumpun.
       The company has already invested 16 billion baht in service facilities since natural gas started to gain popularity three years ago owing to the surge in global crude prices.
       He said NGV subsidies have left a 17-billion-baht loss for PTT, expected to increase to 25 billion baht by the middle of next year. A fixed price of 8.5 baht per kg is 6 baht less than the appropriate price, he said.
       There are 358 NGV service stations operating nationwide -40 owned and operated by private companies and the rest by PTT.
       "We hope to see 50 more stations and investment from private companies by the end of this year," said Mr Prasert.
       However, NGV sales have slid this year as crude prices receded from their highs last year.
       Though crude prices rose to $83 for an eight-month high earlier this month,it was not enough to boost demand.
       PTT reported NGV vehicles running in Thailand at 157,000 units, an increase of 30,000 units from 2008. In 2008,72,000 vehicles shifted from petrol or diesel to run on NGV.
       NGV sales volume rose by 25% to 3,900 tonnes per day from 3,000 tonnes in 2008.
       PTT is aiming for the number of NGV stations to rise to 600 by the end of 2011.
       "As floating NGV prices are not yet a reality, we hope some private partners can shoulder some of the investment costs," he said, insisting there is a high gross retail margin in NGV for interested partners.
       The company officially opened its first CNG (compressed natural gas) station owned and operated by a private investor yesterday at Pathum Thani. PTT is also seeking CNG private partners.
       PTT shares closed on the Stock Exchange of Thailand index yesterday at 252 baht, up nine baht, in trade worth 1.4 billion baht.

Oil hovers near $77 ahead of US economic reports

2009-11-04T05:37:00.000-08:00

       Oil prices hovered near $77 a barrel yesterday in Asia after a big fall the previous trading session as investors eyed upcoming figures on the US economy and a volatile dollar.
       Benchmark crude for December delivery was down 11 cents to $76.89 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.
       The contract fell $2.87 to settle at $77.00 on Fr iday as the dollar gained and stock markets dropped on news US consumer spending and confidence had fallen in September.
       Investors will be looking to a slew of economic indicators this week for further clues about the strength of the US economic recovery. The Labour Department's October employment report will likely be the most closely watched report,but data on manufacturing, services and home sales could also move markets.
       The Federal Reser ve will also comment after a two-day meeting on interest rate policy.
       Oil has slumped from its 2009 high of $82 a barrel last month as the dollar reversed some of its earlier losses. The euro ro se to $1.4757 in Asian trading Monday from $1.4714 on Friday while the dollar rose to 90.15 yen from 89.67 yen.
       "(Oil) prices may not retract too sharply, but the balloon of irrational exuberance has been, at least temporarily,deflated," energy consultancy The Schork Group said in a report yesterday.
       Investors will also be paying attention to third quarter corporate earnings results this week. Ford Motor Co, Cisco Systems Inc, Kraft Foods Inc, Marathon Oil Corp, St arbucks Corp and Time Warner Inc are scheduled to report.
       In other Nymex trading, heating oil rose 1.08 cents to $2.02 a gallon. Gasoline for December delivery gained 0.45 cent to $1.96 a gallon. Natural gas for December delivery jumped 4.3 cents to $5.05 per 1,000 cubic feet.
       In London, Brent crude for December delivery was flat at $75.20 on the ICE Futures exchange.
       While data released last Thursday showed the US has emerged from a prolonged recession, consumer spending,which accounts for two-thirds of the nation's economic activity, fell in September.
       "I think the reality is that the economic signals out there have been mixed,' said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

Wood-fuelled plant set for operation

2009-10-28T19:45:00.000-07:00

       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.

Magnificent seven

2009-10-28T19:44:00.000-07:00

       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.

GREAT AGRO HAS HIGH HOPES FOR STEAMLESS PALM-OIL EXTRACTOR

2009-10-28T19:42:00.000-07:00

       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.

EXPERT SEES PICK-UP IN OIL AND GAS M&A ACTIVITY

2009-10-20T20:49:00.000-07:00

       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.

Oil breaches $75 a barrel for first time in one year

2009-10-14T21:38:00.000-07:00

       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.

Egat weighs B8bn expansion

2009-10-13T05:14:00.001-07:00

       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.

Bangchak introduces country's second EJIP

2009-10-11T23:05:00.000-07:00

       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.

A financial revolution with profound political implications

2009-10-10T23:18:00.000-07:00

       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.

PTT ponders group appeal

2009-10-09T21:58:00.000-07:00

       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.

EIA raises global oil demand forecast

2009-10-07T21:38:00.001-07:00

       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.

Ruling may cost PTT 10% of earnings

2009-10-05T23:38:00.001-07:00

       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.

Oil lingers below $70 as traders eye earnings

2009-10-05T23:35:00.000-07:00

       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.

RULING COULD SLASH ECONOMIC GROWTH

2009-10-05T23:32:00.001-07:00

       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.

Esso on good corporate citizenship with varied activities for society

2009-10-02T19:15:00.000-07:00

       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.

LOCALS AFFECTED BY SLICK IN TIMOR SEA

2009-10-02T19:14:00.001-07:00

       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.

Oil falls below $70 after surging overnight

2009-10-02T19:12:00.000-07:00

       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.

GM pulls the plug on Saturn

2009-10-02T19:11:00.000-07:00

       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.

Change at the top as Chevron CEO retires

2009-10-02T19:08:00.000-07:00

       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.

PTT, EGAT PLAN TO INVEST BT1.8 TRILLION

2009-10-02T19:07:00.000-07:00

       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.

Rayong appeal discussed

2009-10-02T19:05:00.000-07:00

       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.

Oil above $67 in Asia despite high inventories

2009-09-30T22:03:00.000-07:00

       Oil prices rose above $67 a barrel yesterday in Asia despite an increase in US crude inventories for a third week, which suggests consumer demand remains weak.
       Benchmark crude for November delivery was up 42 cents at $67.13 by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. The contract fell 13 cents to settle at $66.71 on Tuesday.
       US oil inventories rose last week, the American Petroleum Institute said late Tuesday. Crude stocks increased 2.8 million barrels while analysts had expected a jump of 2.1 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
       "There's no doubt that we still have very high levels of inventories, and that's probably going to prevent oil fr om breaking above $75," said Christoffer Moltke-Leth, head of sales trading at Saxo Capital Markets in Singapore.
       Oil has traded between $65 and $75 for months as investors mull the strength of a global recover y from recession.Crude bounced off the $65 level earlier this week.
       "The support we saw at $65 was quite significant," Moltke-Leth said. "The hope for recovery is still pretty strong, and that's what's holding prices up."
       In other Nymex trading, heating oil rose 0.94 cent to $1.71 a gallon. Gasoline for October delivery gained 2.59 cents to $1.65 a gallon.
       In London, oil prices rose slightly yesterday as traders awaited the weekly US energy inventories report, analysts said.
       New York's main contract, light sweet crude for November delivery, added 48 cents to 67.19 dollars a barrel.
       Brent North Sea crude for November delivery gained 42 cents to 65.91 dollars a barrel.
       "Today, all focus will be on the weekly US fuel inventories data," said VTB Capital analyst Andrey Kryuchenkov.
       "We expect a small rise in US crude stockpiles, while product stockpiles might see another week of significant inventory builds."
       Later on Wednesday, the US government's Department of Energy will release its weekly oil inventory report.
       Analysts polled by Dow Jones Newswires expect crude stocks to have risen by 300,000 barrels in the past week.
       Gasoline stocks are tipped to increase by 800,000 barrels while distillate stocks, which include heating oil and diesel, are seen to rise by 1.1 million barrels.

POLITICS HOLDING BACK THAI RECOVERY

2009-09-30T22:02:00.001-07:00

       Corporate giants yesterday warned the government that continued political unrest was acting as a major drag on the country's economic growth while the rest of Asia powers ahead in the world arena.
       The global economy is entering into a show of economic rebound but the recovery will take two years to be seen, they said.
       However, there are some good signs for the local economy.
       Interest rates will not be raised until late next year, oil prices will not fluctuate like in the past few years, and the government's second stimulus package will disburse Bt190 billion-Bt200 billion of the total Bt1.43 trillion next year to enhance domestic consumption.
       In particular, the emergence of new economic powers, including China and India, has prompted developed countries, including the US and those in the European Union, to move trade and investment to Asia. They believe Asia will be the first region to overcome the global financial paralysis.
       Panellists at a seminar in Bangkok on the "Global Trading Outlook 2010" pointed out that international trade is driving the country's economy.
       The government should prepare measures to create networks to take advantage of the seamless trade through free-trade agreements, they said.
       Charumporn Chotikasatien, a vice president at Siam Commercial Bank, said the five major growth engines next year would be agriculture, manufacturing and manufacturing-related services, hotels and restaurants, transportation and other services.
       No factors have come into view on the horizon to force the government to raise interest rates.
       "Consumers will enjoy low interest rates until the end of next year," he said.
       However, the stronger baht against the greenback will hurt all exports. It is the result of capital inflows from the West to Asia, the world's main manufacturing belt. This shift will pull up Asia from the crisis before other regions.
       As businessmen venture to new potential markets abroad, particularly the Middle East, the bank plans follow them to serve their new operations.
       "Exploring new export markets calls for risk insurance. The government should take care of the transactions and commercial banks will facilitate the export letters of credit," he said.
       Surong Bulakul, senior executive vice president for international trading at PTT, said the worldwide slump had dampened both oil consumption and price speculation.
       The Organisation of Petroleum Exporting Countries is also afraid that the serious concerns over global warming will make the international community more aware of alternative energy, electric cars and hydrogen power.
       "Opec is worried about the security of oil demand, which cautions them not to do anything to pull up the price and to stabilise production," he said.
       The oil price is also closely related to the geopolitical situation, but now there are no negative factors to push up prices.
       PTT predicts that the crude-oil price will average US$75 (Bt2,500) per barrel this year.
       Kalin Sarasin, managing director of SCT, said traders had to keep a close eye on major factors, particularly the political situation, government spending, international cooperation through free-trade agreements and the G-20, and diverse global market opportunities.
       China and India will be spotlighted in global trading next year. China's economy is predicted to grow by 8 per cent and investments in property and corporations are rising as exports take up the slack from weakening government investment.
       India's government spending will increase by 36 per cent next year, focusing on infrastructure, job creation and improving the livelihood of the poor.
       The business risk factors include fluctuating commodity prices, unstable exchange rates, political unrest, credit risk and the high risk of entering into new markets, he said.
       Sumate Tanthuwanit, president of leading logistics operator Ngow Hock Agency, said the top 10 shippers had faced a combined loss of about $3 billion since the collapse of Lehman Brothers in September last year. They will not reduce service fees but will increase them to survive.
       Container demand has dropped by 9.14 per cent from a year ago. Demand is expected to increase by 2.25 per cent but the supply of ships will shoot up by 15 per cent next year, he added.

SGP TO SNAP UP COGEL FROM CHEVRON CHINA

2009-09-30T22:00:00.000-07:00

       Siam Gas and Petrochemicals (SGP) has signed a deal for 99-per-cent ownership of Chinesebased Chevron Ocean Gas & Energy (Cogel) from Chevron China for BT1.7 billion.
       The move is part of efforts to enhance its business and expand its sources of revenue.
       In a filing yesterday with the Stock Exchange of Thailand, SGP said its board on September 17 passed a resolution approving the purchase by SGP's wholly owned Siamgas HK subsidiary.
       SGP assigned managing director Supachai Weeraborwornpong to sign the agreement with Chevron China on behalf of Siamgas HK and SGP, which he did on Tuesday.
       APPROVAL NEEDED
       Completion of the transaction is subject to certain conditions, including approval by the Chinese authorities.
       Supachai said the share acquisition would be completed next year.
       SGP will use its working capital to pay for the shares. It will loan Bt350 million to Siamgas HK, while Siamgas KH will increase its capital by selling shares to SGP to raise the remaining Bt1.35 billion neede to buy the shares.
       SGP meanwhile will use its own cash flow and retained earnings totalling Bt1.9 billion to buy capital-increase shares in Siamgas HK.
       Supachai said taking over Cogel would help boost SGP's gas sales by an additional 480,000 tonnes a year from the normal 1 million tonnes now and that the company expected to break even on the deal within six years.
       The takeover will also facilitate its plan to expand further into the Southeast Asian and Chinese markets, he sid.
       He insisted the deal would not affect SGP's dividend payments.
       Cogel is a major supplier of liquefied petroleum gas (LPG) in China, which has policy of promoting LPG use.
       Supachai is confident Cogel will turn a profit under the SGP umbrella. He said Cogel had accumulated losses of Bt4.7 billion after Chevron China gradually reduced its investment in the company in a bid to move away from the LPG business.
       He said sGP was in no hurry to reverse Cogel's losses, given that they meant a waiver of Chinese corporate tax.
       He said despite the acquisition, SGP would not revise its revenue forecast for this year. It still targets growth of more than 15 per cent in both revenue and net profit on signs of economic recovery and rising gas demand.
       The company's net profit rose 30 per cent year on year in the first quarter and 5 per cent year on year in the second quarter.
       SGP closed at Bt8.40 yesterday, up 0.6 per cent from the day before.

Map Ta Phut ruling hits SET

2009-09-30T21:58:00.000-07:00

       Share prices of companies in the networks of PTT Plc and Siam Cement Group fell in a range of 1% to 7% during trading yesterday as the country's leading industrial conglomerates faced a new blow over unsettled pollution problems at Map Ta Phut.
       Among the 76 projects worth 400 billion baht ordered to halt construction by the Administrative Court on Tuesday,25 are being developed by subsidiaries and affiliates of PTT, said PTT chief financial officer Tevin Vongvanich.
       These ongoing projects include a sixth gas separation plant, due to be operational by the end of this year,petrochemical plants, and an upgraded refinery to meet Euro 4 emission standards.
       The court ordered the suspension of operating permits for new investments in Map Ta Phut Industrial Estate in Rayong, following an outcry from environmental activists and residents who claim the permits violated Section 67 of the 2007 Constitution.
       "The (temporary) suspension of these projects will affect our trading and contract partners, financial institutions, and related industries across the supply chain. Moreover, it will put at risk over 100,000 jobs, including hiring in [Map Ta Phut]," Mr Tevin said.
       "We are planning to hold talks with concerned government agencies to seek ways to soften the impact from the court's ruling, or we may lodge an appeal."
       Siam Cement said the court order would force its wholly owned subsidiary,SCG Chemicals, to halt nearly completed construction of its upstream naphtha cracker, as well as projects of its downstream subsidiaries and joint-venture units, expected to be completed between late 2009 to mid-2011.
       "In this regard, SCC will be working closely with all relevant government authorities to jointly conclude a solution for all concerned parties, while minimising any effect on SCG Chemicals'investment projects," president and chief executive Kan Trakulhoon said in a statement to the Stock Exchange of Thailand yesterday.
       Also affected is SET-listed Glow Energy, whose 660-megawatt power plant is likely to be postponed.
       Kim Eng Securities said the court was expected to review the case immediately when an appeal is lodged.
       "This issue cannot drag on for long because it will affect the sentiment of the stock market in general," said a Kim Eng spokesman.
       However, Bualuang Securities said the court ruling was unlikely to push the overall index down even though it caused a sudden shock.
       "This news represents a negative
       surprise and is certainly a near-term headwind against the stock of any company with facilities in or near Map Ta Phut," Bualuang said.
       Surong Bualakula, senior executive vice-president for the international business unit of PTT, said Thailand's competitiveness had been crimped by the Map Ta Phut case.
       The development could prompt PTT to look at neighbouring countries such as Cambodia, which has larger natural gas and oil reserves, as well as a pipeline network. The Cambodian government is considering a plan to build an energy complex in Sihanoukville, he said.
       "Map Ta Phut is the centre of Thailand's industrial development region with a competitive advantage in the gas-based petrochemical industry," Mr Surong said."What downstream manufacturers or automakers will invest in Thailand now because they cannot be sure if they will have enough raw materials in the future?"
       Shares of Siam Cement (SCC) closed yesterday at 222 baht, down 5 baht, in trade worth 1.11 billion. PTT shares rose 3 baht, but PTTAR fell 1.10 baht to 24.40 in trade worth 1.7 billion while PTTCH fell 4 baht to 73.25 in trade worth 844 million. GLOW fell 1.75 baht to 32.75 in trade worth 135 million.

PTTEP says spill control work on schedule

2009-09-27T20:17:00.001-07:00

       PTT Exploration & Production Plc said on Saturday that its efforts to stop an oil spill off Western Australia by early October remained on track.
       The latest phase of the relief well drilling was expected to be completed over the next few days, the company said.
       Oil, gas and condensate started seeping into the Timor Sea at the company's Montara well on Aug 21. PTT is working to intersect the well and inject heavy mud to stop the flow.

B10 biodiesel tests to start

2009-09-27T20:15:00.000-07:00

       Local field tests will start soon on biodiesel B10, a blend of 10%methyl ester with 90% diesel fuel, according to an Energy Ministry official.
       PTT Plc and the ministry's Department of Energy Business are carrying out the tests, which are expected to finish next year. The goal is to widen the choice of fuels available to motorists and increase the share of alternative fuels in the country's overall energy use.
       The ministry expects biodiesel B5 to replace all existing B2 in the domestic market by 2011, but B10 use is not expected to be universal until 2022.
       The ministry introduced B5 in 2007 and manufacturers of diesel-engine cars last month agreed to accredit the fuel.
       "We are preparing well in advance to have a guarantee for the public about the quality of B10 before mandatory use in 2022," said the official.
       The national renewable energy plan projects biodiesel use will reach 4.5 mil-lion litres per day, replacing 10% of existing diesel, by 2022.
       Ensuring the availability of sufficient raw materials for biodiesel is a key part of the planning process.
       "We are in the preparatory stage before the supply of crude palm oil will be enough for the transport sector," said the official."Raw palm now is slightly in surplus in the food sector."
       Thailand has a total demand for palmbased methyl ester of 1.8 million litres per day, out of overall methyl ester capacity of 4.4 million litres daily.
       Biodiesel B5 is rapidly gaining acceptance, according to statistics from the department. Demand for B5 doubled year-on-year in August to 22.3 million litres per day. However, B2 consumption dropped 24% to 23.4 million litres.
       Demand for ethanol-blended petrol (gasohol) rose 16.2% to 11.5 million litres per day in August. Gasohol demand has been increasing steadily since 2006,helped by subsidies of pump prices by the state Oil Fund.

China's industrial profits decline 10.6%

2009-09-27T20:14:00.001-07:00

       Profits at China's oil producers, steel makers and other major industrial companies fell 10.6% in the first eight months of 2009 from the same period a year earlier, the National Bureau of Statistics said yesterday.
       Total profits for the biggest Chinese industrial companies -those with annual revenues above 5 million yuan ($732,000)- were 1.67 trillion yuan ($245 billion) from January to August, data showed.
       The data highlighted the impact of the global economic crisis on China's biggest companies, both private and state-owned, despite a multi-billiondollar government stimulus plan.
       But it also marked an improvement from the last such survey in May, in which industrial profits fell 22.9% to 850 billion yuan ($124 billion) in the first five months of 2009 from the same period a year earlier.
       Hardest hit were the iron and steel sector, where profits declined by 71.7%,and the petroleum and natural gas industries, which suffered a 68.5% drop in profits.

Oil prices rebound after recent slump

2009-09-27T20:12:00.000-07:00

       Oil prices rebounded yesterday after recent heavy falls triggered by fresh concer ns about the pace of economic recovery in the United States, the world's largest energy-consuming nation.
       New York's main contract, light sweet crude for November delivery, rose 65 cents to $66.54 a barrel.
       Brent North Sea crude for November delivery climbed 81 cents to $65.63 in London trade.
       "Crude prices are higher after the dollar weakened and G20 nations pledged to keep in place emergency economic stimulus (measures) until there is a durable recovery," said Sucden Financial Research analyst Nimit Khamar.
       "Prices were also supported following a research note from Goldman Sachs who left their price forecasts for crude unchanged at $85 by the end of the year and an average of $90 in 2010.'
       G20 leaders were yesterday set to say that economic stimulus measures to cope with the global financial crisis should be maintained "until a durable recovery is secured,' according to a draft of their joint statement.
       Oil closed down more than three dollars on Thursday as mixed US economic data and signs of sluggish US energy demand highlighted fears about a tepid recovery from the global recession.
       Prices fell almost three dollars on Wednesday in reaction to a large jump in US crude oil inventories - a sign that energy demand remains weak.
       Worries about the pace of the US economic recovery intensified after data Thursday showed existing home sales fell 2.7% in August to 5.10 million units,snapping a winning streak.
       On Wednesday, a widely-watched Department of Energy report showed US crude reser ves rose 2.8 million barrels in the week to September 18,against analyst expectations oF a decline.
       Stocks of distillates, which include heating fuel, rose by three million barrels last week. Distillates are closely monitored ahead of the northern hemisphere winter when demand for heating fuel peaks.
       Energy demand has plunged after the global economy slipped late last year into its worst recession since the 1930s.
       This sent oil prices tumbling from historic highs of more than $147 in July 2008 to around $32 in December.
       Prices have since recovered somewhat but investors remain concerned over the pace of the upturn.
       Oil prices rose strongly above $70 a barrel on Tuesday as the US currency hit a one-year low against the euro.
       Since oil is traded in the US currency,a weaker dollar makes the commodity more attractive to holders of stronger units, leading to greater demand and pushing prices higher.

PTTEP grows in Australia

2009-09-27T20:11:00.000-07:00

       PTT Exploration and Production Plc (PTTEP) is expanding its upstream oil business in Australia through an acquisition of OMV Timor Sea Pty.
       PTTEP Australia Browse Basin, which is wholly owned by PTTEP, has signed a share sales agreement to purchase 100% of OMV Timor Sea from OMV Pty Australia, chief executive Anon Sirisaengtaksin said yesterday.
       The acquisition will allow PTTEP to acquire petroleum exploration rights for five blocks and two offshore oil fields in a transaction worth US$10 million (about 335 million baht).
       In January, Thailand's largest petroleum exploration and production company won approval from Australian regulators for the $170-million purchase of Coogee Resources Ltd as its first acquisition there.
       "Our new acquisition in Australia is a part of PTTEP's strategic plan to seek opportunities in target countries with petroleum potential," Mr Anon said.
       "The new investment is aimed at generating potential synergies of existing assets and adding value of investment profiles while ensuring the company's growth in the long term."
       OMV Timor Sea owns offshore exploration and production assets in northwestern Australia. It currently invests in Audacious and Tenacious offshore fields, where production is targeted to start within two years.
       The Australian company also owns five exploration blocks and holds an 18.75% interest in the Jabiru and Challis oil fields in the southern Timor Sea,which PTTEP now operates with 70.94%ownership.
       Maroot Mrigadat, the PTTEP president, said the new acquisition would help the company develop its oil and gas exploration and production in Australia, a key strategic objective.
       The deal is also expected to cut operating expenses and provide material developments as well as exploration upside from prospects accessible from key oil and gas projects, said Mr Maroot.
       Located 650 kilometres west of Darwin in the Northern Territory, the Jabiru and Challis fields began oil production in 1986 with output of 4,200 barrels per day. The blocks have estimated net proven reserves of 700,000 barrels of oil equivalent as of May 2009.
       OMV Timor Sea has also been granted exploration and production licences for five offshore projects with estimated net proven reserves of 3.4 million barrels of oil equivalent.
       PTTEP has expanded its business steadily through investments in 13 countries to date.
       In another development, parent PTT Plc has signed an agreement with Tunn Star Co to jointly develop a lubricant business in Burma. Over five years through 2014, the alliance aims for annual lubricant sales of 5 million litres in Burma from next year onward.
       "The lubricant market in Burma is very competitive with more than 100 operators including local and foreignowned brands," said Artasith Pothiapinyanvisuth, PTT's executive vicepresident for commercial and international marketing.
       By joining with a Burmese distributor,PTT aims to become one of the top five lubricant brands there within three years, he added.
       PTT now markets its lubricants in several overseas markets including the Philippines, Vietnam, Greece, Pakistan,Nigeria, New Zealand and China. The company leads Thailand's lubricant market with a 36.8% share.
       PTTEP shares closed yesterday on the Stock Exchange of Thailand at 146.5 baht, down 1 baht, in trade worth 985 million baht, and PTT finished at 262 baht, down 3 baht, in trade worth 1.07 billion baht.

Suthep calls on Cambodia to offer its cooperation

2009-09-27T20:09:00.000-07:00

       Thailand and Cambodia should work together to develop and benefit from the natural resources in their disputed waters, suggested Deputy Prime Minister Suthep Thaugsuban.
       The two countries should set up a joint venture to mutually develop resources in the disputed waters claimed by both countries, Mr Suthep said yesterday.
       He made his comment in response to reports that Cambodia had unilaterally granted a petroleum exploration concession to a Japanese company in the disputed zone.
       A joint venture could offer a resolution to the dispute as both countries had yet to discuss the demarcation of the area,he said.
       "Regarding the disputed waters of Thailand and Cambodia, Cambodia is also claiming possession and has already started granting the areas to concessionaires.
       "As Thailand is doing the same thing, I think if this continues,the situation would become all the more complicated," Mr Suthep said.
       "What we can do is enter into negotiations and Suthep: Seeking agree that the deal with Cambodia claimed territories should not overlap. We should cooperate and share the benefits."
       Mr Suthep said he had not yet contacted any Cambodian officials to discuss the idea as he currently had bigger issues to deal with.
       However, if Prime Minister Abhisit Vejjajiva wanted the matter to be dealt with immediately, he would go ahead and do so, said Mr Suthep.
       Vasin Teeravechyan, chairman of the Thai-Cambodian Joint Boundary Commission, explained that both Thailand and Cambodia were granting concessions in disputed waters to demonstrate their right over the areas and concessionaires should not launch any operations there as long as there is no pact between the two countries.
       So far, petroleum exploration has not begun on behalf of Cambodia in the disputed waters.
       Such operations were time-consuming and also required the installation of an oil rig which could not escape the Royal Thai Navy's eye as its vessels regularly patrol the contentious sea borders, he said.
       Cambodia earlier agreed to grant a concession to France-based Total for petroleum exploration in a disputed area between Thailand's Koh Kut island in Trat province and Cambodia's Koh Kong island. But the deal has still not been signed.
       Mitsui Oil Exploration Co has applied to Cambodia for exploration rights in the overlapping area.
       The Thai government cannot go ahead with the negotiations without seeking parliamentary approval for a framework on the talks first.

PTT NAMES LUBRICANT SUPPLIER FOR BURMA

2009-09-27T20:08:00.000-07:00

       PTT yesterday appointed Tunn Star as its lubricant distributor in Burma in a bid to boost its annual sales volume there to 5 million litres.
       Atasit Pho-aphiyanvisut, PTT's president for commercial and overseas marketing, signed a five-year distribution agreement with Tunn Star chairman Tony Chai.
       "PTT has worked with Tunn Star since 2007. It has been operating in the business for more than 40 years and is dedicated to boosting sales in this fiercely competitive market in which more than 100 local and foreign companies are active," Athasit said.
       He is confident the agreement will lead to higher confidence in PTT lubricant products, which meet international standards.
       PTT is already experiencing growing sales volume in Burma, from 2 million litres last year to an expected 3 million next year. This has boosted the company to 5th place in the Burmese market, and it expects to move into the top three soon.
       PTT first started exporting its lubricant products in 2005, and they are now available in the Philippines, Laos, Cambodia, Vietnam, Greece, Pakistan, Nigeria, New Zealand and China.
       The oil and gas conglomerate first entered the lubricant business in 2001, supported by one of the most advanced research - and - delelopment centres in Southeast Asia.
       PTT has worked with leading producers of additives to increase product quality and cover all market segments.
       It now controls the biggest share in the Thai market, 36.81 per cent as of July.

Man charged in B50m scam

2009-09-24T21:26:00.001-07:00

       A man has been charged with operating a pyramid investment scheme that attracted more than a thousand investors and 50 million baht in funds.
       Natthachai Machi,41, is also believed to have masterminded several other scams including opening a fraudulent flight attendant training operation, but he has denied all allegations.
       Crime Suppression Division police have taken Mr Natthachai into custody after two warrants were issued for his arrest.
       CSD deputy chief Suphisan Phakdinoranat said Mr Natthachai and his accomplices had operated a company to lure investors to invest in a fraudulent oil investment scheme.
       His victims were led to believe their investments of 250,000 baht would lead to a quick profit of 300,000 baht.
       But the investors lost at least 50 million baht between them in the investment scam, Pol Col Suphisan said.
       Other suspects who have not been arrested include Thanaphon Chotisaen,Anan Nuthae, Kritaphat Trakulsomsiri and Thatsaphorn Kaosaiyanan.
       Pol Col Suphisan said Mr Natthachai had also opened Universe Airline Co to deceive customers who wanted to become flight attendants.
       He said Mr Natthachai shut down the company abruptly after receiving money from people who had signed up for training. He also did not pay the company staff their wages.
       The employees filed a complaint with police which led to Mr Natthachai's arrest.
       Mr Natthachai is thought to have opened several other firms to deceive investors into investing in various types of fraudulent schemes.

IRPC, PTTAR IN JOINT UPGRADE OF REFINERY TO MEET EURO 4

2009-09-24T21:24:00.001-07:00

       Local integrated oil and petrochemical producer IRPC will co-invest with PTT Aromatics and Refining to upgrade the latter's refinery to meet the Euro 4 standards.

       The new standards will be implemented by the beginning of 2012.
       "We'll swap oil products among the subsidiaries of the PTT Group and co-invest in the upgrading project of PTTAR's oil refinery. We've not yet finalised the form of the co-investment, but we are expected to make a minor investment in this project," said IRPC chief executive Pailin Chuchottaworn.
       He declined to disclose the exact investment budget for the project.
       Pailin said it would not be worth it to upgrade all of the facilities to meet Euro 4 standards, because then the remaining premium oil output, which would also be produced at high cost, would only be sent to other countries.
       Thai Oil and Bangchak have already upgraded their facilities to comply with Euro 4 standards.
       Meanwhile, IRPC has targeted revenue of Bt180 billion this year, down from Bt245 billion last year, due mainly to lower prices for oil and petrochemical products.
       Seventy per cent of revenue will come from oil refining and the rest from petrochemicals.
       Pailin said the third quarter would be better for the company than the second quarter, thanks to rising prices of oil and petrochemical goods.
       He said the price of plastic pellets was about US$1,200 (Bt40,300) per tonne, up 20 per cent from the average in 2008, when oil and petrochemical prices fluctuated wildly.
       He said the price for plastic pellets could remain at the $1,200 level next year.
       "The price may tend to soften, due to greater supply from new production plants in the Middle East. But there's a chance demand will spike from the Shanghai Expo and the Asian Games in China," he said.
       IRPC yesterday introduced an electronic transaction system, in cooperation with Kasikornbank, to boost customer satisfaction and the efficiency of its plastic trading system, since it exports to more than 100 countries.
       He said the company was trying to improve its office system, which would play a significant role in enhancing business performance and helping achieve the goal of being in the top 25 per cent of Asian petrochemical complexes by 2014.
       The new system will reduce operation costs by Bt30 million per year, he said.

IRPC to beat goal with B180bn sales

2009-09-24T21:22:00.000-07:00

       SET-listed IRPC Plc expects to beat its previous target for the year and top 180 billion baht in revenue due to strong petrochemical demand from China.
       The country's leading petrochemical manufacturer and oil refiner now predicts its revenue will drop by 26% this year from the 244.7 billion baht earned in 2008.
       But the company has performed much better in the current quarter as plastic resin is now priced at US$1,200 per tonne, up from $1,000 earlier, chief executive Pailin Chuchottaworn said yesterday.
       "Our performance is obviously good in the current quarter and better than the second quarter. The business outlook is now brighter than what we saw earlier," said Dr Pailin.
       IRPC, which is 37% owned by PTT Plc, now projects revenue of 180 billion baht this year based on oil at about $70 per barrel. In the quarter to June,the company posted a net profit of 2.42 billion baht, down from 5.12 billion in the same period last year, in line with a decline in revenue of 45% to 40.3 billion baht.
       The petrochemical business will account for about 54 billion baht of this year's estimated revenue. The figure is expected to be maintained in 2010.
       "Plastic prices will stay at $1,200 per tonne at best next year. The demand from China will remain strong but the outlook remains uncertain, depending largely on additional petrochemical capacities to come on stream next year,"he said.
       IRPC is now utilising 75% of its refining capacity of 215,000 barrels per day.
       The petrochemical spread has improved slightly in the current quarter from the previous quarter, while the refining margin has weakened marginally. The company's gross integrated margin is in double digits, said Banlue Chantadisai, senior executive vicepresident for corporate accounting and finance.
       Average refining capacity is expected to stay at about 150,000 to 160,000 barrels per day in 2009, compared with 180,000 barrels last year. The existing output is enough to serve IRPC's petrochemical business.
       Executives also said that IRPC was likely to go for a product swap option with PTT Aromatics and Refinery Plc,another PTT petrochemical and refining unit, to upgrade its refineries to meet the Euro 4 emissions standard.
       The Euro 4 project is part of IRPC's $1.2 billion five-year investment plan to become a top integrated petrochemical producer in Asia by 2014.
       PTT Plc, Thailand's largest energy company, has studied a merger of its petrochemical and refining affiliates including IRPC and PTTAR. The plan is expected to be finalised next month.
       IRPC yesterday launched its "Ideal Solution" service to enable petrochemical trading transactions on personal digital assistants (PDA) worldwide. The system will help reduce operational costs by 30 million baht per year.
       Shares of IRPC closed yesterday on the Stock Exchange of Thailand at 4.48 baht, down six satang, in trade worth 1.69 billion baht.

Oil prices hover above $71 amid weak demand

2009-09-24T21:21:00.001-07:00

       Oil prices hovered above $71 a barrel yesterday as signs of weak crude demand were offset by the effects of a slumping US dollar.
       Benchmark crude for November delivery was down 6 cents at $71.70 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $1.83 a barrel to settle at $71.76 on Tuesday.
       Oil prices have traded between $65 and $75 for months as consumer demand in the US has remained tepid despite evidence of an economic recovery.
       "Brimming oil stocks around the world continue to expose demand weakness," said JBC Energy in Vienna.
       US oil inventories rose unexpectedly last week, the American Petroleum Institute said late Tuesday. Crude stocks increased 276,000 barrels while analysts had expected a drop of 2.25 million barrels,according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
       "The reason oil is trading in this range is this battle between weak supply fundamentals and optimism for economic recovery,' said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
       "This seems to be a level that both producers and consumers are happy with."
       A weakening US dollar, meanwhile,has helped support oil prices. Because crude is priced in dollars, investors outside the US buy it up when the dollar drops. The euro rose yesterday in European trading to $1.4817 from $1.4788 the previous day while the dollar fell to 90.99 yen from 91.15.
       Olivier Jakob of Petromatrix in Switzerland said that while the Dollar Index _ which values the dollar against a basket of foreign currencies _ was now at same level as in September 2008, back then the Nymex contract was worth $109 a barrel.
       The big difference, Jakob noted, 'is that US petroleum stocks are at least 140 million barrels above the levels of a year ago."
       In other Nymex trading, gasoline for October delivery was down 1.91 cents to $1.7625 a gallon, and heating oil lost 0.26 cent to $1.8095 a gallon. Natural gas was up 0.4 cent to $3.613 per 1,000 cubic feet.
       In London, Brent crude fell 37 cents to $70.16 on the ICE Futures exchange.
       Investors are closely monitoring the results of a US Federal Reserve policy meeting that could indicate the pace of economic recovery of the United States, the biggest energy consumer. The meeting ends yesterday.
       Leaders from the Group of 20 developed and developing nations are also expected to discuss the state of the global economy when they meet later this week in the US city of Pittsburgh.

Dollar down, gold and oil rise

2009-09-23T22:20:00.001-07:00

       The dollar weakened for the first time in three days against the euro aon speculation group-of-20 leaders this week will call for gains in other currencies to help reduce global trade imbalances.
       Gold rose for the first time in four days in London as a sliding dollar boosted demand for the preciousmetal as an alternative investment.
       Crude oil also rose for the first time in four days before a report forecast to show US crude supplies contracting, while a weaker dollar boosted the investment appeal of commodities.
       The greenback fell versus 14 of the 16 major currencies after a spokesman for Canadian Prime Minister Stephen Harper said leaders meeting in Pittsburgh on September 24-25 will discuss "a frameworkd for balanced and sustainable growth".
       New Zealand's dollar rose toward a six-week high against the yen after a government report showed the current-account deficit shrank to the narrowest in more than four years.
       "There's talk that world leaders may seek to address the US imnalances," said Masashi Kurabe, head of currency sales and trading in hong Kong at Bank of Tokyo Mitsubishi UFJ, a unit of Japan's biggest publicly trded bank. "This may lead to weakness in the dollar."
       The US currency dropped to $1.4714 per euro as of early afternoon in Tokyo, from $1.4680 on Monday in New York. It declined to 91.75 from 91.93 and weakened to $1.6237 per pound from $1.6217. The yen was little changed at 135.01 versus the euro from 134.96.
       New Zealand's dollar strengthened 1.2 per cent to 65.79, after earlier climbing to 65.89, the highest level since August 10. The so-called kiwi rose 1.5 per cent to 71.71 US cents. Australia's dollar advanced 0.7 per cent to 86.93 cents.
       The US dollar Index, a six-currency gauge of the currency's strength, slipped as much a s.9 per cent as signs the global economy is recovering spurred investors into buying higheryielding assets.
       The measure has dropped 6.3 per cent this yer as gold, trading 1.9 per cent below a record $1,032.70 an ounce set in March 2008, has climbed 15 per cent.
       "It's mainly dollar driven" and "in the longer term we still expect more dollafr weakness," said Walter de Wet, a London-based Standard Bank analyst. "When we approached the mid-$990 level, there was some physical buying coming in and providing some support."
       COMMODITIES
       Immediate-delivery bullion gained $9.80, ir 1 per cent, to $1,013.50 an ounce by mid-morning local time. The commodity on Monday dropped as low as $995.97 an ounce. December gold futures were 1 per cent higher at $1,014.90 an ounce on the New York Mercantile Exchange's Comex division.
       US crude oil inventories declined a fourth week,according to analysts surveyed by Bloomberg News before an Energy Department report due today. Official data showed net crude oil imports by China,Asia's largest consumer, rose 18 per cent to 17.92 million tonnes in August, the second highest on record.

Sound familiar?

2009-09-23T22:18:00.001-07:00

       Your TOT crossed its heart and hoped to die if it fails to have actual third-generation mobile phone service in a little corner of Bangkok before New Year's Eve; Vichien Narkseenuan, the firm's senior executive president for vice, said he expects to sign a deal Real Soon Now with a socalled mobile virtual network operator (MVNO) that will carry the TOT service,although no names, please; Mr Vichien promised "about" 500,000 numbers would be available; real yuppiephone networks scoffed at the TOT offer to let them in on the deal, because they fear that if they rent a network now, the National Telecommunications Commission won't let them bid for a licence to run their own 3G services.
       Vichien Narkseenuan, the senior executive president of vice for your TOT ,said that the state monopoly plans to open a third-generation (3G) phone service with 100,000 numbers, and serving the entire country; TOT has no intention of building its own base stations,though, and will rent them from real phone companies; Mr Vichien forgot to mention when this nationwide 3G service might start for the lucky 100,000.
       The National Telecommunications Commission announced it will open public hearings on third generation phones next Monday; Prasert Aphipunya, secretary in charge of vice for the NTC, said you should bring along a large truck load of money if you want to start the bidding for licences, say,oh, somewhere around 10 billion-witha-"b" baht; after next weeks' hearing,there will be a notice in the Royal Gazette ,and actual bidding for four (and only four) available licences may open as early as December; rules on all of this should be up on the NTC's website by now at www.ntc.co.th.
       For the third time in a row, the strug-gling TT&T company won a multibillion-baht lawsuit against your TOT and for the third time in a row your TOT told them to pound sand; this time,an agree-upon arbitrator decided that TOT owed the up-country phone provider 2.3 billion baht in misguided revenue sharing for long distance calls;but TOT president Varut Suvakorn rejected the arbitration and told TT&T,"See ya in court, boys"; in case the Administrative Court rules against TOT yet again, Mr Varut said he was pretty sure the state firm didn't have that kind of money to pay off anyhow; TT&T explained that lawsuit number four is about to be filed.
       No 2 yuppiephone firm DTAC of Norway opened its new headquarters in new Chamchuri Square , bragging that it spent one billion baht on the 19-floor (!) digs; all 3,200 DTAC employees relocated from the Chai Building to the new location at the Sam Yan intersection,overlooking Chulalongkorn University;CEO Tore Johnsen signed a 10-year lease for the 61,160-square-metre office,which includes the firm's main call centre; Mr Johnsen said new staff will work harder to pay the extra rent money; the kicker is that DTAC is asking the following price for the Chai Building one billion baht; Mr Johnsen said that DTAC was pressing ahead aggressively on its 3G trials and so on and etc and zzzzzzz.
       Energy Minister Wannarat Channukul, apparently unaware that you can't spell "Thaksin" without "hub", said that Asean should become the energy exporting hub of the world; no, really,his reasoning is that Southeast Asia has so much food that it can make biofuels galore and sell it to the world at Arabesque profits; not only does Southeast Asia (sic) have a lot of extra food to feed the world's cars, it's, well, better "higher yields and more commercially viable for biofuel than corn and beetroot" from the US and Europe; to coin a phrase, in the klongs there are fish and in the fields there are biofuels.
       Energy Minister Wannarat Channukul called in state firms and phuyai of the private sector for a heart-to-heart joint statement that everyone would cooperate on saving energy; this year's spin is that the programme will "save"100 billion baht, and Mr Wannarat got away unchallenged with a claim that a similar project last year saved 30 billion baht; the deal is that the Federation of Thai Industries (FTI) and the Thai Chamber of Commerce (TCC) and so on - 30,000 firms altogether - will work on conservation, purchase green technology and so on, and in return they will get some tax breaks and subsidies on loans taken through the energy services company fund (Esco); the minister is looking for one billion baht to fund Esco this year.

Beijing tries new tack on Spratly spat

2009-09-23T22:17:00.001-07:00

       China sees no solution in sight to territorial disputes over potentially oil-rich South China Sea regions so it has begun to discuss possible joint projects with other claimant countries to avoid confrontations, a Chinese official said yesterday.
       A joint scientific study by China, the Philippines and Vietnam to determine the prospects of striking oil or gas in a part of the contested region called the Spratlys is a model that Beijing seeks to undertake with other claimants, Philippines Ambassador Liu Jianchao said.
       Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam claim all or part of about 100 Spratly islets, reefs and atolls that are believed to be sitting atop vast deposits of oil and natural gas reserves. The largely uninhabited islands and surrounding waters straddle busy sea lanes and are rich fishing grounds.
       The disputed islands are regarded a potential flash point for conflict in Asia.
       The battle for ownership of the region has settled into an uneasy standoff since the last fighting, involving China and Vietnam, killed more than 70 Vietnamese sailors in 1988.
       "I think the settlement of the issue will take a very long time," Mr Liu said,citing a China-Russia border problem that took more than 50 years to resolve.
       China wants to settle the disputes peacefully by engaging each claimant country in bilateral negotiations. It has opposed any attempt to include outsiders like the US or Asean in talks.
       Resolving the issue will be complex,but China wants to enter into joint projects with other claimant countries to build confidence and "move forward",Mr Liu said. With confidence-building projects, there will be "less chance of confrontation", he added.

Oil hangs near $70 in Asia after big tumble

2009-09-23T22:15:00.000-07:00

       Oil prices hung near $70 a barrel yesterday in Asia after falling steeply overnight amid news that China's crude consumption fell in August.
       Benchmark crude for October delivery was up 59 cents at $70.30 a barrel by late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $2.33 to settle at $69.71 on Monday.
       Energy consumption in No rth America and Europe has been crimped by recession, leaving China as one of the few countries that continue to consume oil, gasoline and diesel in growing quantities. That pace, at least during late summer, appeared to slow,according to a report released Monday.
       Chinese oil demand slid 5.4% in August from July, the first monthto-month drop since March, according to Platts, the energy information arm of McGraw-Hill Cos, as the world's second-largest oil consumer reined in oil imports and crude throughput rates at its domestic refineries.
       But some analysts expect a secondhalf recovery in demand from Europe and the US combined with still decent energy appetite from Asia to boost oil prices.
       "I think we're going to see a pretty significant recovery in the second half in the US and Eur ope, and demand from China has been holding up,' said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "I see more upside than downside for oil prices right now."
       Moltke-Leth said crude could r ise above $75 during the next month. "If we can break through that, prices will likely jump to $80."
       In other Nymex trading, gasoline for October delivery rose 1.61 cents to $1.7675 a gallon, and heating oil rose 2.12 cents to $1.7729 a gallon. Natural gas,after tumbling more than 5 percent, was up 10.5 cents to $3.681 per 1,000 cubic feet.
       In London, Brent crude rose 62 cents to $69.33 on the ICE Futures exchange.
       "Oil has continued to take its cue from the value of the US dollar,' said Victor Shum, senior principal at Purvin and Gertz energy consultancy in Singapore.
       "The dollar has weakened against the euro and also the yen and that has provided some support to oil."
       Since oil is traded in the US currency,a weaker dollar makes the commodity more attractive to holders of stronger units, leading to greater demand and pushing prices higher.
       Shum said investors are waiting for the results of the Fed meeting yesterday and today, with keen interest on any indications US interest rates will be raised as the economy stabilises.

NATIONAL ENERGY PANEL MULLS INCREASING MARGINS FOR RETAILERS

2009-09-23T22:13:00.000-07:00

       The National Energy Policy Committee will review oil retailers' marketing margins to see if there is a possibility of increasing it from Bt1.50 to Bt2.20 per litre owing to rising investment costs, a source from the committee said yesterday. According to a study by the Energy Policy and Planning Office, the new margin is based on a 12 per cent return on investment for a medium-sized two-rai petrol station.
       However, the source said this rate does not take into account returns on non-oil businesses such as convenience stores or car-cleaning services.
       The study also pointed out that the margin for liquefied petroleum gas (LPG) should be raised from Bt3.257 to Bt3.03 per kilogram.
       "The office has presented the study, but we will discuss if it |could be used as an official reference point at the meeting," the source said.
       The committee will also consider incentives to boost consumption of E85 gasohol, which could prompt the Oil Fund to increase the subsidy from Bt7.13 per litre to Bt10.
       The higher subsidy would lower the cost of the high-ethanol-content fuel by Bt3 per litre from Bt22.72 at present.
       The panel will also consider raising the Oil Fund's budget to convert LPG taxis to ones driven by natural gas for vehicles (NGV) and the pricing structure for purple oil - the high-sulphur oil used for small fishing boats.

Oil falls to near $71 in Asia amid weak demand

2009-09-23T22:12:00.001-07:00

       Oil prices fell to near $71 a barrel yesterday in Asia as high crude stockpiles and weak demand tempered enthusiasm about recent signs of improvement in the world's largest economy.
       Benchmark crude for October delivery was down 88 cents at $71.16 a barrel by late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gave up 43 cents Friday to settle at $72.04 a barrel.
       The recession has sapped American fuel consumption, and US oil stockpiles are 14% larger than last year even as recent data suggests the economy is clawing out of recession.
       The Energy Information Administration said Wednesday that the country also is sitting on a sea of distillate fuels including heating oil, with stockpiles approaching a 27-year high.
       "Most of the macro data from the US over the last month has been suppor-tive of oil prices," said David Moore,commodity strategist at Commonwealth Bank of Australia in Sydney. "But inventories remain high and demand is weak, so that's capping prices.'
       Moore said crude will likely average $64 a barrel in the fourth quarter before rising to average $80 in the October to December period of 2010.
       In other Nymex trading, gasoline for October delivery slipped 1.58 cents to $1.8166 a gallon, and heating oil fell 1.74 cents to $1.8105 a gallon. Natural gas fell 5.0 cents to $3.728 per 1,000 cubic feet.
       In London, Brent crude fell $1.07 to $70.27 on the ICE Futures exchange.
       "Oil is stalling ahead of the fourth quar ter and we expect a gradual pick-up in volatility at the ver y end of September," said VTB Capital analyst Andrey Kryuchenkov.
       "We still believe that the upside is capped at the moment and we do not expect significant gains until October.'
       Crude oil fell on Friday, under pressure from a slightly stronger dollar and as many traders chose to take profits.
       The dollar's small appreciation also weighed on dollar-priced oil, making it more expensive for buyers using other currencies.
       "The petroleum complex was softer on Friday as the US dollar mounted a comeback," analysts at John Hall Associates wrote in a note to clients.
       The dollar's overall weakening trend _it sank to a near-year low against the euro last week _has been price-supportive of oil and other commodities.
       Oil also won support last week from weekly official data showing a large decrease in US crude reserves.
       The decline was seen as an indication that US oil demand was improving but some analysts cautioned that its stockpiles remained huge and pr ices had not returned to June highs.

CONSTRUCTION MATERIALS PRICES TO BE CONTROLLED

2009-09-23T22:10:00.000-07:00

       Producers of construction materials will be allowed to hike their retail prices if the price of diesel increases another Bt5 a litre, the Commerce Ministry said yesterday.
       The unavoidable increase of Bt5 a litre will directly affect transportation costs and the production costs of manufacturers, it said.
       Construction materials are on a list of goods for which prices are controlled. The ministry recently extended price-control measures on the list of goods until the end of the year.
       High on the ministry's agenda at present is the enhancement of domestic consumption in line with the government's Thai Khemkhaeng project.
       Commerce Minister Porntiva Nakasai said that the ministry would attempt to curb price increases for construction materials until the end of this year to help shoulder consumers' expenses.
       "Money from the Thai Khemkhaeng project, which will soon be injected into public investment, will partly stimulate growth in the construction industry. The government will try to curb the retail prices of these products to ensure a lower burden on consumers, while traders will not take the opportunity to increase their retail prices," Porntiva said.
       After inspecting the prices of construction materials on Monday, the ministry found that most prices were within its recommendations.
       As of September 2, the price of steel rod had increased slightly from Bt107.29 in August to Bt109.78, or from Bt21,500 to Bt22,000 per tonne. The retail price of mixed cement (Tiger brand) is quoted at Bt135 to Bt142 per 50-kilo bag, lower than the ministry's recommended price of Bt144 per bag. Portland cement (Elephant brand) is quoted at Bt145 to Bt156 per bag, while the recommended price is Bt161.
       Internal Trade Department director-general Yangyong Phuangrach said the ministry would only consider allowing steel prices to increase if domestic diesel prices rose by another Bt5 per litre.
       "The department will control prices as there are no serious negative factors to increase production costs for the remainder of this year," he said.
       Moreover, he said the department would not allow any producers, in particular producers of condensed milk, soda and canned fruits, to increase their retail prices as sugar prices remain unchanged.

       Commerce Minister Porntiva Nakasai said that the ministry would attempt to curb price increases for construction materials until the end of this year to help shoulder consumers' expenses.

IN SEARCH OF A BIOFUEL BONANZA

2009-09-21T23:19:00.000-07:00

       Thailand wants Asean to take the lead in creating and controlling the market for alternative fuels, but political and environmental challenges are daunting. By Yuthana Praiwan
       In recent decades, the petroleumrich Middle East lapped up profits from parts of the world that lack that vital resource.Now that global supplies of oil are dwindling, Thailand believes Asean's agriculture sector has the potential to become a leader in biofuels.
       Following the Middle East's Organisation for Petroleum Exporting Countries (Opec), Thailand's Energy Ministry has pitched an "Opec for Biofuels" to its Asean friends.
       Biofuels are defined as liquid or gas fuels derived from biomass including crops, and they produce far lower carbon emissions than fossil fuels such as coal and petroleum.
       Sarawut Kaewthip, senior planning and policy analyst from the Energy Ministry, said some countries in the region clearly had vast potential to become major exporters of biofuels, but there was still a long way to go before the region could create the equivalent of an Opec for the commodity.
       "The collaboration must be very close between leading producers Indonesia,Malaysia and Thailand. It could take many years of price increases and drops for them to learn how to control the market," said Dr Sarawut.
       World trade conditions have also changed dramatically since the formation of Opec, making a biofuel cartel tougher to arrange for policymakers and private operators, said Dr Sarawut.
       "The Thai government sees the readiness and plentifulness of biofuel resources not used for food production.From now on the three big players have to co-develop their resources to set up an Opec of biofuels and also prevent deforestation," he said.
       "But we have to accept that biofuel cannot completely replace fossil oil;biofuels are only another choice for countries that want to reduce dependency on oil imports or cut greenhouse gases."
       The Energy Ministry and the International Energy Agency both expect that biofuels could replace up to 25%of fossil oils in the transport sector by 2030, a significant leap from 1.5% this year.
       Biofuels could supply 30 million barrels per day 20 years from now compared to total fossil oil demand today of 85-86 million bpd.
       "If Asean could limit biofuel production in Asia-Pacific to only 500,000 to 600,000 barrels of supply, we could dominate the regional price," Dr Sarawut said.
       "But how many years or decades from now that happens depend on the attention devoted by each government and the private sector.
       "Thailand is the world's largest exporter of cassava and second largest for sugar, but there is no value added to these commodities. If you develop them to be ethanol and biofuels we can sell them at a higher price and a higher margin."
       He said Brazil controlled ethanol prices as the world's largest exporter and it could be a major partner to Asean as Brazil emphasises the Atlantic Ocean market while Asean would focus on the Pacific.
       Biofuel development is tough but needs to be done quickly, said Capt Dr Samai Jai-Indr, an energy expert with the Royal Thai Navy and a member of the House of Representatives Energy Committee.
       He warned that industrialised countries would keep their eyes on the biofuels industry.
       Europe, the United States and East Asia will never welcome biofuels unless they can secure their own resources in some way, he said.
       "The companies that benefit from exploration and production in the Middle East - the US's Chevron, Royal Dutch Shell from the Netherlands and Britain, Total of France, BP of Britain and Mitsubishi of Japan - are all from developed countries that dominate the natural resources of other countries,"said Dr Samai.
       "They may move fast to control world fuel plantation areas including those here in Asean. If [developed countries]can't control the industry, they would seek ways such as human rights, the environment or increased food prices to slow demand in the industry because otherwise they would have to depend on imported biofuels.
       "Look at Brazil for an example. Its private and public sectors withstood complaints by developed countries that Brazil's sugarcane plantations demolished parts of the Amazon forest."
       Now some developed countries buy biofuel resources in Africa and Latin America.
       Dr Samai suggested biofuel producers explore opportunities in Burma and Indochina, as they possess the proper climate for fuel crops and have low labour costs.
       Meanwhile, Srihasak Arirachakaran,executive director of Thai Agro Ethanol,one of the first ethanol producers in Thailand, hopes to see an organisation materialise.
       "Yet these are very much rhetorical,academic questions as there are many hurdles to overcome, not just the wills of leaders," said Dr Srihasak.
       Thailand is in an early stage of biofuel development as the cost of production is still too high and the whole industry needs to develop from upstream to downstream, said Dr Srihasak.
       "It is important to consider crop yields, proximity, sourcing and distribution. In the meantime, each government needs to monitor closely what it needs and what it can export to assure sufficient supply for the region. This is not difficult if ministers co-operate."
       Biofuels are appropriate for mature economies such as Europe, Japan and North America, where governments are tackling emission problems by replacing fossil fuels with biofuels and subsidising green fuel prices, said Dr Srihasak.
       While the Thai government believes in the fast development of the techno-
       ogy, Dr Sarawut points out that the new generation of biofuel technology should focus on making it commercially viable.
       Malaysia and Indonesia,the world's largest and secondSamai: Developed largest exporters nations seek control of palm oil, have shown interest in an Asean biofuel Opec.
       Dadan Kusdiana, Indonesia's Ministry of Energy and Mineral Resources representative, said Indonesia was ready to collaborate with other countries, particularly the Asean region.
       Biofuels development is on the national agenda as Indonesia hopes to not only curb fossil fuel imports but also improve local employment and standards of living.
       Indonesia set a target for renewable energy of 17% of total energy use in 2025 by providing incentives for investment and subsidising costs for some types of renewables.
       "There is no deforestation here and we are researching ways to find efficient land uses and increase productivity,"he said.
       Malaysia's Ministry of Plantation Industries and Commodities says its development of biodiesel is aimed at reducing dependence on fossil fuels and protecting the environment, even though using palm oil for biodiesel is not economically viable.
       Since 2006, Malaysia has encouraged innovative local biodiesel production technology for normal and winter-area grade biodiesel; namely, Malaysia Palm Oil Biofuel. Now the technology has been exported to Thailand and South Korea.
       "The move to develop biofuels does not come from the cost of fossil fuels,but to generate a return for local agriculture and industries involved with this sector," said a Malaysian report.

Rocky road ahead to "Green Opec"

2009-09-21T23:18:00.000-07:00

       Despite certain advantages Asean countries have in producing biofuels,competition remains intense, making the path toward an "Opec of Biofuels"anything but smooth, according to Richard Jones, deputy executive director of the International Energy Agency (IEA).
       "I think that would be impossible [for Asean to form an Opec of Biofuels]because, unlike oil, biofuels are based on agriculture and any culture has agricultural potential," Mr Jones said in Bangkok recently.
       If supply is not limited, collaborative efforts to control prices would not be feasible, he added.
       "But I do think that, as with any traded goods, the countries that have a comparative advantage will be the countries that become the most important producers. I think that in that regard, because of your climate, fertile soils and plenty of water, I think that there will be a comparative advantage."
       Apart from being close to large markets such as China, Asean countries have experience in growing the necessary and most appropriate crops for biofuels, he said.
       Thailand, however, should switch from producing ethanol from molasses directly to using sugar juice from sugarcane.This would result in achieving full efficiency, said Mr Jones.
       Energy Minister Wannarat Channukul said at the recent Bangkok Biofuel 2009 seminar that Asean countries had the potential to be an export hub for biofuels and alternative energy.
       Paolo Frankl, head of the IEA's Renewable Energy division, cautions that biofuels will never become widely used in transport.
       "I think it's important to realise that biofuels will never substitute for 100%of transport fuels," he said."In the long term, our projection is that they will arrive at 25% by 2050. But they will be an important part of the solution and Asean countries can play a very good role, in particular for regional markets and also to some extent for European markets, but there still will be a difference to Opec."
       He explained that this was due to the availability of land resources and environmental challenges.
       An integrated approach that looks at the management of natural resources in the most efficient manner possible should be undertaken by Asean countries.
       Making sure that biofuel production does not limit the availability of food for the population, for instance, should be the first priority, said Mr Frankl.
       Brazil, for instance, burns the leftover residue from the sugarcane used to produce ethanol for power generation for its mills. The excess electricity is then sold.
       In the longer term, the task should be to develop more non-food feedstocks through the introduction of secondgeneration technologies. This will require time and international collaboration, said Mr Frankl.
       In the meantime, Mr Jones recommended countries in Asean to develop certification procedures not only to overcome non-tariff barriers but also to earn a reputation among consumers.
       "Certification can sometimes allow you to charge a premium price for your product if you can point to a certification that shows your feedstocks were raised in an environmentally friendly manner."
       For instance, cutting down a forest to make way for sugarcane releases tremendous amounts of carbon dioxide.

EXPLORATION RIGHTS BIDDING NEXT YEAR

2009-09-21T23:17:00.001-07:00

       The Mineral Fuels Department next year plans to open the 21st round of bidding by companies for exploration rights to petroleum fields.
       Kurujit Nakarntap, director-general of the department, said last week that most of the fields had already been surveyed but the four-year term of exploration rights had expired.
       He was confident that this new round would attract many applicants.
       In the last round two years ago, the department invited companies to explore 65 fields, of which 56 were on land, totalling 211,687 square metres, and nine were in the Gulf of Thailand, totalling 23,919 square kilometres.
       If the companies find oil and want to start pumping, they have to apply for a production concession from the department.
       The department expects to collect Bt44 billion in production concession fees this year, plus Bt88 billion from concession holders in the Malaysia-Thailand Joint Development Area in the Gulf of Thailand.
       The department estimates that investment in petroleum exploration and production this year would match last year's Bt130 billion.
       The country produces 90,000 barrels per day of condensate and 150,000bpd of crude oil, while the production of 2.7 billion cubic feet per day of natural gas is lower than domestic demand.

Snack-maker UM to open more stores at PTT stations

2009-09-21T23:16:00.000-07:00

       UM Tridaughter Sweet (UM), the maker and franchiser of Kanom Baan Ayakarn Thai Cake snacks, has opted to expand its network of outlets to PTT petrol stations, rather than shopping malls, in a bid to tap more families.
       UM director Nuttaya Sawatpoon said the company has 23 Kanom Baan Ayakarn shops in shopping malls, which should be enough to serve that market. It has decided to focus more on opening shops in new types of locations. Petrol stations are seen as a way of expanding into the family market.
       "Consumers in the family segment shop at convenience stores, bakery shops and coffee shops when the family vehicle is filled up at the petrol station," Nuttaya said. Moreover, the rents at petrol stations are not high, she said.Kanom Baan Ayakarn already has three shops at PTT petrol stations. Newer PTT-based outlets would be smaller than these, however.
       The company believes the expansion into PTT's petrol stations will boost its revenue to Bt150 million next year, from an expected Bt100 million this year.
       The sweet-maker is following the example of Siam Hands, the maker of Tangmo-brand apparel, which recently began opening shops at PTT petrol stations, believing the network of 1,400 stations nationwide, and the purchasing power of its customers, could help boost its profits.
       Nuttaya said UM will open five shops in the fourth quarter of this year, four of which will be located at PTT stations. The plan is expected to require investment of at least Bt500,000 per PTT shop.
       The fifth shop is a franchise in Hat Yai, Songkhla.
       Nuttaya said the five new shops are expected to offset a decline in sales in the second quarter.
       "We need to be aggressive in opening new shops, as the domestic economy is improving. This year the company targets sales of Bt100 million, up from Bt97 million last year," she said. The company will have 38 shops by the end of this year, up from 33 at present. Five of the shops are run by franchisees. The rest are UM's own shops.
       Nuttaya said the company plans to open at least 10 new franchise stores next year.
       Expansion through franchisees is expected to grow, she said, adding that the company is in negotiations with investors in Nakhon Pathom, Ayutthaya and Suphan Buri.

Leak won't hurt PTTEP financially

2009-09-19T20:48:00.000-07:00

       The performance of PTT Exploration and Production (PTTEP) should not be affected by an oil spill from one of its wells off Western Australia, although environmentalists say the damage could be worse than feared, say stock analysts.
       Oil and gas condensate has been leaking from a well in the offshore Montara field owned by PTTEP since Aug 20.
       Conservation groups expressed concern that the cleanup may take longer than the company has estimated, and that the damage may be severe.
       However, DBS Vickers Securities said work to stop the leak was still on the 50-day schedule from Aug 20. The cleanup expense is also likely to be covered by a US$75-million insurance policy.
       About 1,200 tonnes of oil are estimated to have leaked into the Timor Sea to date.
       "This is a disaster that risks blowing out further in terms of its scale and impact on the ocean," said Darren Kindleysides, director of the Australian Marine Conservation Society.
       The spill has covered 15,000 square kilometres, with 400 barrels a day leaking from the field, he said.
       The leak developed 3,500 metres below the ocean floor during drilling by the Thai company's subsidiary, PTTEP Australasia. Halting the flow by drilling a relief well to plug the leak with mud is expected to take about 25 more days,PTTEP said yesterday.
       Australian Maritime Safety Authority observations indicate the size of the spill is reducing, said Lauren Tindale, a Perth-based spokeswoman for PTTEP Australasia.
       Vichitr Kuladejkhuna, a DBS analyst,maintained his previous estimate that the incident may cost the company between US$10 million and $50 million,depending on how well and quickly it controls the situation and limits the damage.
       Damages in the range of $10-50 million would result in a drop of PTTEP's profit by 6% next year from this year,said Mr Vichitr.
       Bualuang Research analyst Thanatthep Chandrakarn agreed that the expense should not be more than the $75 million estimated earlier.
       However, according to Mr Thanatthep, the company may set aside an additional $50 million for unexpected additional costs such as compensation in case the Australian government or a third party sues the company for environmental contamination.
       "In a worst-case scenario, we believe that the operation of the Montara field would be delayed by 60 days, with a drop of profit by 5.6% for 2010 from this year. As well, overall expenses should not pressure the company's performance,[but] might have affected its share prices in the short term," said Mr Thanatthep.
       A statement that PTTEP released on Thursday said that work began on Wednesday to drill a 17.5-inch diameter hole to a depth of 1,622 metres and was expected to be completed over the weekend.
       It follows the successful drilling of an initial 26-inch diameter hole to a depth of 149 metres and a 20-inch conductor pipe being run through and cemented into position on Tuesday.
       The total operation to drill to a depth of 2.6 km to intersect the existing well and allow for the injection of heavy mud to stop the flow is expected to take about three-and-a-half weeks, it said.
       Shares of PTTEP closed yesterday on the Stock Exchange of Thailand at 146.5 baht, up 50 satang, in trade worth 518.4 million baht.

Oil below $72 on concerns economic recovery slow

2009-09-19T20:47:00.000-07:00

       Oil prices weakened ye sterday in Asia, dampened by concerns that a recovery in the US economy may be slower than expected.
       Benchmark crude for October delivery fell 81 cents to $71.66 a barrel at late afternoon Singapore time in electronic trading on the New York Me rcantile Exchange. The contr act fell 3 cents to settle at $72.47 on Thursday.
       Victor S hum, an energy analyst with consultancy Pur vin & Gertz in Singapore, said oil prices pulled back in tandem with a slide in regional stock markets and a stronger US dollar.
       The moves followed new US government data indicating a slow economic recovery, which may mean less demand for energy by the world's largest crude user in the near term.
       "There is a supply overhang in both crude oil and products. Oil pricing at a $70 plus level is quite vulnerable given the weak fundamentals," Shum said.
       The recession has sapped American fuel consumption, and US oil stockpiles are 14% larger than last year. The Energy I nfor mation Administration said Wednesday that the country also is sitting on a sea of distillate fuels including heating oil, with stockpiles approaching a 27-year high.
       The government reported Thursday that natural gas stockpiles continue to grow as well and are now at 16.4%above the five-year aver age for this time of year.
       There are some bright spots.The Labour Department said new claims for unemployment benefits fell to the lowest level since July. And the Commerce Department said housing construction in August surged to the highest level in nine months with a flurr y of new apar tment building projects.
       While on the surface that would suggest energy consumption may rebound, the jobless numbers however, are far below levels that would indicate a healthy economy.
       Shum said oil has traded within the $65-$75 a barrel since July and likely to stay within this range in the coming months.
       In other Nymex trading, gasoline for October delivery slipped 0.72 cent to $1.8440 a gallon, and heating oil fell 0.8 cent to $1.8329 a gallon. Natural gas rose 6.7 cents to $3.515 per 1,000 cubic feet.
       In London, Brent crude fell 71 cents to $70.84.
       Shares in Asia followe d the New York lead yesterday after three days of gains.
       Westmore said however that betterthan-expected economic data from the United States limited the fall in oil prices on hopes that energy demand will soon pick up in the world's largest economy and energy consumer.

GREEN HURDLES LOOM FOR EIGHT PROJECTS

2009-09-19T20:46:00.000-07:00

       Upstream and downstream petrochemical plants as well as nuclear power plants are on the list of eight industrial projects with a "serious impact" on local communities that was recently issued by the Industry Ministry.
       Appearing on the list means these projects must pass health-impact assessments, receive local communities' endorsement in a hearing and win approval from an independent environmental body to be set up by the Natural Resource and Environment Ministry under the auspices of Article 67 of the Constitution.
       The other six project activities covered by the list are underground mining; lead and zinc mines; chemical-based mineral dissolving and upstream steel production with daily minimum capacity of 20,000 tonnes; industrial estates for upstream steel production or upstream to midstream petrochemical plants; dumping sites and kilns for hazardous wastes; and fossil-fuel power plants (except gas-fired plants) with minimum capacity of 100 megawatts.
       Vice Industry Minister Sorayud Petchtrakul yesterday said Minister Charnchai Chairungrueng had endorsed the list this past Monday.
       "We have no choice but to issue the list, in order to comply with the law," he said.
       Department director-general Witoon Simachokedee said his agency had already approved operating licences for 12 projects with a combined value of Bt59 billion.
       So far, only PTT's gas-separation plant, which is not on the list of serious-impact activities, is awaiting department approval.
       LAWSUIT
       Nevertheless, even though the list has been declared, in accordance with the government's resolution, the projects can proceed in the absence of the independent environment body.
       Suthi Atchasai, coordinator of a citizens' network on the Eastern Seaboard, yesterday said the network would soon file suit against the National Environmental Board for approving the environmental impact assessment for 55 projects slated for the industrialised zone in Rayong's Map Ta Phut.
       Most of those projects are petrochemical projects of PTT, the Siam Cement Group and Dow Chemical.
       Prime Minister Abhisit Vejjajiva yesterday told villagers from Map Ta Phut that not all of the 55 projects in the area were causing environmental problems. Villagers should consider each on a case-by-case basis.
       He insisted there should not be a consensus that investment in Map Ta Phut must be frozen.
       "Personally, some of them can proceed," he said.
       He also mentioned the possibility of declaring Map Ta Phut a special administrative zone. With its own autonomy, the zone would demonstrate unity and "speedy and united" decisions, Abhisit said.
       He also believes public access to the zone will be granted. However, a law must be enforced to push through the idea.
       Abhisit said he was pushing for a conclusion to determine if Map Ta Phut should become a special administrative zone.
       He said government measures to contain the environmental impact in Map Ta Phut would be designed in a framework that could be enforced in other areas.

China showers gifts on tiny, resources-rich island

2009-09-16T07:45:00.000-07:00

       "All this assistance from China to Timor Leste is full of sincerity and without any selfishness, unlike what the Western media has speculated."FU YUANCONG CHINA'S AMBASSADOR TO EAST TIMOR.
       The capital Dili's gleaming new Presidential Palace and Foreign Ministry,gifts from China, stand in stark contrast to nearby burnt-out buildings and are symbols of how the energy-hungry superpower is growing closer to tiny,oil-rich East Timor.
       In the 10 years since the independence vote that led to a split from Indonesia,China has spent more than US$53 million in aid to East Timor, also known as Timor Leste.
       While that is just a fraction of the $760 million in Australian government aid, China has raised its profile in dusty Dili in several other ways. It is building big and showing generosity such as its donation of 8,000 tonnes of rice during a recent food crisis. Noticeable projects such as a new Ministry of Defence building, houses for soldiers and schools are under way as are scholarships and training programmes for civil servants.
       In all, China is sending a very public message that it is serious about strengthening bilateral ties with East Timor, which many analysts put down to its desire to diversify strategic energy interests.
       Loro Horta, who is a China expert at Singapore's Nanyang Technological University and is the son of East Timor's President Jose Ramos-Horta, said that the aid is linked to China's desire for energy and infrastructure contracts.
       "The Chinese are desperate for oil,every single drop for them counts and they are definitely looking to Timor as potential to meet that need," he said.
       East Timor is one of Asia's poorest and least developed countries, but it has enormous oil and gas reserves.
       The Bayu Undan gas field is expected to reap $12-15 billion by 2023, according to the country's Natural Resources Minister Alfredo Pires. Bayu Undan is already the subject of a deal between Australia and East Timor but other, untapped reserves still need development partners.
       Another oil field, Kitan, has an estimated 40 million barrels of recoverable light oil, Mr Pires said, and the Greater Sunrise field contains around 300 million barrels of condensate and 9.5 trillion cubic feet of gas, according to the United Nations.
       Lucrative opportunities also exist in the minerals sector, including copper,gold, silver and marble, and for bigticket infrastructure projects as East Timor tries to reverse years of underinvestment.
       Mr Pires said Spain, China and Australia are all keen on a piece of the Timor resources pie, while East Timor expert Damien Kingsbury from Deakin University said the United States and the United Kingdom are also interested.
       China and East Timor's links date back centuries. Hakka Chinese traders sailed there more than 500 years ago looking for sandalwood, rosewood and mahogany. Many stayed on, forming an overseas Chinese community as in many other parts of Asia. Today, Dili's main street is lined with buildings, some of which display Chinese script, families can be seen praying at a Confucian temple in downtown Dili, while Chinese traders run appliance stores on busy streets. Chinese labourers are already at work on one of two heavy oil power plants which are under construction after Dili in 2008 awarded the Chinese Nuclear Industry 22nd Construction Company a $360 million contract to build the power plants and a national power grid. East Timor also paid $28 million for two petroleum vessels from China.
       Mr Loro Horta said China is also angling for big ticket infrastructure contracts such as a pipeline that East Timor wants built from its Greater Sunrise oil field to a proposed processing plant on land.He said Chinese oil giant PetroChina has already done studies and is keen to drill.
       "In 2004, PetroChina did a seismic study and said they didn't find much.But then, two years ago, I heard that they were willing to drill but they want exclusivity rights," he said.
       Yang Donghui, a spokesman for the Chinese ambassador in Dili, said that the first phase of the seismic investigation was completed as an aid project, but that a proposed second phase investigation became the subject of commercial talks between the East Timor government and PetroChina.
       China's ambassador to East Timor Fu Yuancong rejected speculation that China's interest in the fledgling nation is driven by a desire to gain an advantage when East Timor is handing out contracts to develop its billion-dollar oil and gas fields."All this assistance from China to Timor Leste is full of sincerity and without any selfishness, unlike what the Western media has speculated. The Chinese government never bore any political strategy in Timor Leste," he said.
       According to Mr Loro Horta,"The growing Chinese presence is part of their natural expansion into Southeast Asia and I think Timor is not really their priority. But they are definitely keeping an eye on it. The Chinese are very patient and they think very long term."

Gorgon gas project gets final green light

2009-09-14T20:03:00.000-07:00

       Chevron Corp and its partners gave a formal green light to building the Gorgon liquefied natural gas project in Australia, the world's biggest new development, at a lower than estimated cost of US$37 billion.
       The final investment decision, widely expected after the project cleared a series of key regulatory hurdles last month following years of review, is the starting gun on a project that will generate huge revenues for contractors and deliver some 8% of the world's LNG when it begins production in 2014.
       The decision underscores a growing appetite for gas in the Asia-Pacific region and heralds a shift in the hierarchy of Asian consumers that will see China overtake Japan as the dominant LNG buyer, a strategic position that gives China increased bargaining power as it chooses which project to back.
       Gorgon will also put pressure on about a dozen other LNG projects in Australia that are competing for both willing buyers in China, India, South Korea or Japan,and for the limited manpower and materials necessary to build the huge terminals that will make Australia the world's No.2 gas exporter behind Qatar.
       Chevron put a price tag of A$43 billion (US$37 billion) on the first 15 million tonne per year (tpy) phase of the project,some 14% less than costs estimated by the government several months ago, and said the partners would decide within a year whether to add two further pro-duction units on Barrow Island, from an initial three, to expand output.
       "Gorgon has been a long time coming.Gorgon is destined to be an iconic project,a legacy project with massive investments set in motion today," George Kirkland,Chevron's executive vice president of global upstream and gas, said at a briefing in Perth.
       Chevron reiterated that it will fund its share of the project's construction from its own balance sheet.
       The go-ahead will be a relief to Chevron and partners ExxonMobil and Royal Dutch Shell, each holding a 25% stake in the project, who have endured years of delay amid environmental concerns about its location on Barrow Island, off the coast of western Australia, and rapid cost escalation.
       Kirkland said the recent downturn in the oil and gas industry has reduced capital costs, working to their advantage.
       It is expected to create about 10,000 jobs at its peak and will be a boost for both the country's export earnings and a potential boon for project contractors ranging from US firm KBR to South Korea's Hyundai Heavy Industries and Australia's Leighton Holdings.
       Chevron has already awarded A$2 billion worth of contracts and expects to award a further $10 billion by year-end.
       "Gorgon could prompt other projects to speed up to try and fix costs before the next great leap forward caused by rapid expansion and limited resources,"said Tony Regan, an LNG consultant with Tri-Zen International in Singapore.
       The Gorgon gas field, discovered more than 30 years ago, is the first LNG project to be approved since December 2008 and is also Australia's largest ever resource project, set to generate A$300 billion in Australian export earnings and a government revenue of A$40 billion.
       Gorgon is also a breakthrough in terms of being the world's biggest carbon sequestration project. Chevron will spend A$2 billion to bury 40% of Gorgon's greenhouse gas emissions, or 3.4 million tonnes per annum, by injecting the gas into a reservoir 2 km (1.2 miles) below Barrow Island.
       The greater Gorgon area is estimated to have resources of 40 trillion cubic feet of natural gas, the equivalent of 6.7 billion barrels of oil."The resource contains enough equivalent energy to power a city of one million people for 800 years,"Chevron said.

Australia scales back Timor Sea clean-up

2009-09-13T19:48:00.000-07:00

       Australian authorities said yesterday they had scaled back a threeweek operation to disperse oil and gas leaking from a Timor Sea drilling rig operated by Thailand's PTTEP company.
       Oil and gas has been leaking from the West Atlas drilling platform,690km west of Darwin, since an undersea pipe ruptured on Aug 21.
       The slick from the rig is 170km from the coast but is reducing in size and requiring less dispersant, a spokeswoman for the Australian Maritime Safety Authority (Amsa) said. Amsa has been using aircraft flying from Darwin each day to keep the spill in check.
       Amsa said it could scale back the cleanup operation now that a mobile rig was preparing to drill 2.6km into the sea bed to plug up the leaking well with drilling mud. PTTEP expects the drilling to take at least four weeks.
       Last week Resources Minister Martin Ferguson said concerns about the environmental impact of the leak had been overstated. But environmentalists said it already posed a threat to whales,dolphins and turtles, and warned that the slick could easily reach the coast and cause ecological damage.
       PTTEP, which has not revealed what caused the leak, said it has deployed 300 workers to clean up the spill.
       PTTEP director Jose Martins said the leak was diminishing and that his company would pay for the clean-up.

Oil hovers in Asia as US crude inventories plunge

2009-09-12T17:04:00.000-07:00

       Oil prices hovered near $72 a barrel yesterday in Asia as a drop in US crude inventories suggested demand may be picking up.
       Benchmark crude for October delivery was down 9 cents at $71.85 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, the contract rose 63 cents to settle at $71.94.
       Crude has traded between $65 and $75 for a few months as investors struggle to gauge the strength of the global economic recovery. Evidence of a sustained rebound in crude consumption would likely trigger a break out of that price range.
       The Energy Information Administration said Thursday that crude inventories fell by 5.9 million barrels last week,more than three times estimates of analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
       Oil has jumped $4 this week as investors eyed rising stock markets and a slumping US dollar.
       The Dow Jones industrial average rose 0.8% Thursday for its fifth day of gains.Meanwhile, the euro rose yesterday in Asian trading to $1.4598 from $1.4574 the day before and the dollar dropped to 90.97 yen from 91.77 yen.
       The Organisation of Petroleum Exporting Countries, which decided to leave output levels unchanged at a meeting Thursday in Vienna, said it was cautious about the outlook for an economic recovery.There remains great concern about the magnitude and pace of this recovery,said Opec, which pumps about 40% of the worlds oil production
       In other Nymex trading, gasoline for October delivery rose 0.64 cent to $1.81 a gallon, and heating oil was steady at $1.79 a gallon. Natural gas fell 2.0 cents to $3.24 per 1,000 cubic feet.
       In London, Brent crude was up 5 cents to $69.91.
       The under-performing greenback,which fell to a new 2009 low against the euro Thursday, drove investors to dollar-priced commodities including oil which becomes cheaper for holders of other currencies.Investors increased appetite for risk has clearly taken its toll on the dollar since the spring, said analysts from London-based Capital Economics Consultancy.This week it touched a new low for the year against the euro, they said.
       The euro breached $1.46 Thursday,hitting a nine-month high of $1.4613 as risk appetite increased, which typically leads to a weakened greenback.
       During economic uncer tainty, investors turn to the US dollar for its safe haven status but when sentiment improves, they usually favour other high-yielding assets.

CHINA CONDERMNS AMERICAN TARIFFS ON STEEL PIPES

2009-09-11T06:06:00.000-07:00

       China yesterday condemned a US decision to slap tariffs on steel pipes from the mainland, as US President Barack Obama mulled whether to also curb tyre imports from the Asian giant.
       The disputes are a litmus test for Obama's trade policy with Beijing, and are coming to the frefront ahead of his highly anticipated first presidential visit to China set for November.
       In July, Obama laid out his vision of "cooperation, not confrontation" between Washington and Beijing, saying the relationship would "shape the 21st century", but the thorny trade issues could throw a spanner in the works.
       The US Commerce Department said on Wednesday it had made a preliminary decision to impose duties to as much as 31 per cent on Chinese carbon or alloy tubular steel products used in oil and gas wells, following claims they were backed by unfair subsidies.
       That announcement drew a quick and angry response from Beijing.
       "China is highly concerned over this matter. We strongly oppose such trade protectionist moves," a commerce ministry spokeswoman said.
       The spokeswoman declined to comment on what action China would take, if any, in response to the US move, saying the ministry could make an additional statement later in the day.
       From 2006 to 2008, US imports of such pipes, officially known as oil country tubular goods (OCTG), from China increased 203 per cent by volume, the statement said. They were valued at US$2.6 billion (Bt88.8 billion) last year.
       The Commerce Department launched a probe into the case after complaints from various US industry groups and unions, including US Steel, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union.
       "As a result of this preliminary determination, Commerce will instruct US Customs and Border Protection to collect a cash deposit or bond based on these preliminary rates," the department said in a statement.
       It will issue a "final determination" on the issue in November, it said.
       "This is the largest countervailing duty and dumping case filed against China, based on the value of trade," a lawyer representing a Chinese company involved in the case, said.
       The decision came as Obama has pressure to slap punitive duties on Chinese tyre imports, and save jobs at home as the world's largest economy tries to recover from a recession.
       Obama is required to make his decision by September 17, ahead of hosting Chinese President Hu Jintao at the G-20 summit in the US city of Pittsburgh on September 24-25.

Bio-methane in pipeline as new choice for motorists

2009-09-09T23:28:00.000-07:00

       PTT Plc plans to introduce compressed bio-methane gas,(CBG) a new renewable fuel for vehicles, by late next year.
       CBG will provide an alternative to existing natural gas for motorists.
       PTT, the sole local distributor of NGV (natural gas for vehicles), has been researching biogas for vehicles since last year, said Songkiert Tansamrit, executive vice-president of the PTT Research and Technology Institute.
       The aim is to serve demand for gas in the transport sector instead of investing in expensive NGV facilities.
       CBG has been used for generating electricity but biogas in transport will be a first for Thailand, and is in line with the government's push to develop alternative fuels.
       Unlike NGV, which PTT launched in 2001, CBG is made from a process that converts waste from ethanol, palm oil and tapioca starch into methane gas,then refines it for use in car engines.
       PTT will use waste water from Ubon Agro Energy Co, a cassava processor in in Ubon Ratchathani. The waste water can produce up to 1,600 tonnes of raw biogas per month.
       The raw biogas is then sent to a PTT gas treatment unit to remove any carbon dioxide. From there it is sent to a PTTowned compressor unit and is finally distributed by trucks to a substation located 30 kilometres from its main station at Ubon Ratchathani.
       PTT is now preparing to call an auction for the quality treatment technology.When the technology is acquired, Thailand can expect to see CBG for use in vehicles around mid- to late 2010.
       Average CNG usage is now 3,750 tonnes per day, and is expected to increase to 8,200 in 2013.
       "There shouldn't be any problem [for future usage]. CBG is an alternative fuel that provides another choice rather than ethanol and diesel," said Dr Songkiert.
       CBG is considered neutral as it neither increases nor decreases carbon dioxide emissions.
       PTT is looking at nine more plants to source raw biogas, five of which produce tapioca starch, one ethanol and the rest palm oil. While some already have biogas plants, PTT will ask them to use biomass instead, said Dr Songkiert.
       PTT shares closed yesterday on the Stock Exchange of Thailand at 260 baht,up 7 baht, in trade worth 5.46 billion.

GLOBAL AGENCY IN BANGKOK TALKS

2009-09-08T20:00:00.000-07:00

       The Energy Ministry has discussed Asean's plan to make the region an "OPEC of biofuels" with the International Energy Agency.
       Energy minister Wannarat Charnnukul said after presiding over the opening of a two-day Bangkok Biofuels 2009 conference that the ministry had discussed with the IEA the Asean grouping's scheme for substantial development of biofuel production, in line with its energy plan covering the years from 2010-15.
       The Asean plan features the development of second-generation biofuels, or the production of biofuels from plant raw materials, such as biodiesel made from weeds and ethanol produced from wood scraps and straw.
       The biofuel conference is being held for Asean members to brainstorm the plan to turn the regional grouping into a hub for global biofuel production and export, or the Opec of biofuels, by capitalising on the potential of each Asean country. For example, Indonesia and Malaysia are the world's major palm-oil exporters, while Thailand has considerable raw materials for producing ethanol.
       Twarath Sutabutr, director of the ministry's Energy Policy and Planning Bureau, said each Asean country would reveal its pricing structure for ethanol at the Bangkok Biofuel 2009 conference, so that a common competitive pricing structure could be fixed.
       The IEA is an intergovernmental organisation that acts as an energy-policy adviser to 28 countries in their efforts to ensure reliable, affordable and clean energy supplies.
       Thailand is also implementing a 15-year energy-substitution plan that will see an increase in ethanol consumption to 9 million litres per day and that of biodiesel to 4.5 million litres per day by 2022. During the first five years of the plan, which started last year, Thailand has focused on promoting the production of ethanol from molasses, as well as wind and solar energy. From 2013-17, it will focus on research and development of energy technology.
       IEA deputy executive director Richard Jones said the world's present use of biofuel accounted for only 1.5 per cent of the 85 million barrels of oil used every day by the transport sector. The figure is expected to rise to 4 per cent by 2030.
       However, he said the figure could reach 8 per cent in 2030 if all countries in the world concertedly promoted biofuel. If this happened,biofuel use could even surge to 25 per cent, or 25 million barrels per day, in 2050, out of projected total oil consumption of 100 million bpd.

Opec unlikely to tighten taps

2009-09-07T19:16:00.000-07:00

       With oil prices about where Opec wants them and a modest economic upturn in the offing, the oil cartel isn't likely to tighten the taps when its leaders meet in Vienna on Wednesday.
       Prices have been hovering near $70 a barrel, and with returning growth expected to support demand, analysts don't expect the Organisation of Petroleum Exporting Countries will feel any need to cut output targets.
       "Absolutely nothing," said John Hall,of John Hall Associates in London.
       Opec president Jose Botelho de Vasconcelos, who is also Angola's oil minister, said last week that signs of recovery "suggest the 12-member group won't need to intervene.
       "Everything shows they will keep output unchanged," he said.
       Kuwait also says it thinks oil prices are stable and there's no need to cut production, even though stockpiles are rising. And Algeria, Kuwait, Libya, Qatar and the United Arab Emirates have signaled they're happy with the current output quota of just under 25 million barrels a day.
       Saudi Arabia, Opec's No.1 producer and most influential member, has said $75 a barrel is a fair price for both consumers and producers - a level that would allow for continued investments in the oil sector without undermining efforts at global economic recovery.
       "Unless Saudis say,'We're going to cut by a million barrels a day,' nothing's going to happen at Wednesday's meeting," Hall said.
       Benchmark crude for October delivery crested $68 a barrel on Friday in electronic trading on the New York Mercantile Exchange. Over the past six weeks, it has fluctuated in the $65-$75 range amid conflicting signs of economic recovery.
       Opec meets more than a third of the world's annual oil demand, which the International Energy Agency has put at nearly 86 million barrels a day for 2008 - about 2.5 million barrels more than for recession-ridden 2009.
       The economic downturn has taken such a big bite out of demand for Opec crude, it will take four more years just to recover to 2008 levels, the cartel predicts in its latest outlook.
       Still, stockpiles abound despite recent Opec production cuts: The US Energy Department said last month that US crude stocks rose by 200,000 barrels for the week ended Aug 21.
       "We're swimming in this stuff," said Stephen T. Schork, president of The Schork Group in Villanova, Pennsylvania,and editor of a newsletter tracking industry trends.
       Schork thinks Opec may have to rein in output next March, but for now, oil prices "have settled into a range that the market can sustain," Schork said.
       "Oil that's $65 to $75 per barrel translates into gasoline prices of $2.50-$2.75 a gallon, and we know the consumer can handle that," he said.
       Crude prices have taken a wild ride over the past year or so: They peaked at $147 a barrel in July 2008 and plunged close to $30 this past February before settling into their current range.
       Opec's oil market report for August cautioned that "the market is still fundamentally weak amid ample stocks of crude and products." Prices in the short term, it said,"will depend largely on economic developments."
       But experts agree that markets will rebound. Morgan Stanley expects oil to average $85 a barrel in 2010, and crude prices are bound to rise with demand as the northern winter home-heating season draws near.
       Another perennial wild-card issue that threatens to drive up prices: hurricane season, which will run until early November and has the potential to disrupt refineries in the Gulf of Mexico.
       Experts say the flagging US dollar which has nudged crude prices up in recent days - also could be a factor if it keeps weakening against the euro.

OIL INDUSTRY AIMS HIGH AS IT TAKES UP THE CAUSE OF GEOSCIENCE IN VARSITIES

2009-09-06T20:35:00.000-07:00

       US oil giant Chevron, leading Thai oil explorer PTT Exploration and Production and Chulalongkorn University have joined forces to launch the first master's degree programme in petroleum geoscience in Thailand. It opened its first semester a week ago.
       Chevron Thailand Exploration and Production's president Tara Tiradnakorn, PTTEP's president Maroot Mrigadat, PTTEP's vice president Somkiat Chanmaha, Chulalongkorn's president Pirom Kamolratanakul and the associated dean of Chulalongkorn's Science Faculty Vudhichai Parasuk, outline their ambitious goal of making the programme an internationally-recognised centre of excellence in geoscience research in Southeast Asia. The Nation's Pichaya Changsorn reports.
       Is this programme the first such cooperation between the petroleum industry and a university in Thailand?
       Tara: It is the first cooperation between a university and [petroleum] industry in terms of opening of a new master's degree course. It is also an international programme. Thailand has produced oil for 30 years and we thought there should have a master's degree course supporting personnel to gear up directly for oil and gas production.
       In the past, we normally sent out our staff to study abroad. However, a similar programme in Brunei was discontinued three or four years ago and we saw the opportunity [to introduce the course in Thailand] because there is still a lot of demand [for petroleum geoscientists] in the region. This programme will aim for students coming from the entire region.
       There is a shortage of human resources in this field in the region, and over the past 25 years many foreign experts have been required to come into the region. Oil and gas demand has also increased rapidly in the region.
       Maroot: Frankly, it must be accepted that we still might not get top high-school students to enrol in the Science Faculty and the Geoscience programme [at the bachelor's degree level], despite the fact that we need top-grade students. PTTEP - and Chevron as well - we have been conducting a campaign at secondary schools and more students are interested in geoscience. The image of this industry has been an image of a person with a hammer, roaming about the forest.
       Salaries for a petroleum geoscientist or a petroleum engineer are currently not much different.
       Tara: For this first year, Chevron sent seven people who received our scholarships to join in the course, out of a total of 19 students. Five other students receive scholarships from the programme with no obligation, two students won scholarships from PTTEP and the remaining five students are paying their own fees. The students come from six countries: Thailand, Indonesia, Vietnam, Myanmar [Burma] and the Philippines.
       What is the demand/supply outlook for this profession?
       Tara: We have to gradually take up [students from the new Chula programme]. Although there is a lot of demand, there are limitations in the organisation, so we have to blend [newly graduated staff] with existing employees. At the same time, we have to keep our alliance with the top-10 high schools to attract their best inputs.
       Our industry has been developing for 25 to 30 years. We have developed engineers to succeed expatriates but for geoscientists, we can substitute only about half.
       Maroot: We have produced natural gas for 30 years, but we're still half-way to full potential. There are a lot of demands in the country. Furthermore, we have begun to expand overseas.
       Somkiat: The job market [for petroleum geoscientists] is wide. It's not limited to Thailand and not just oil companies, you can also work for service companies and can go worldwide.
       [Our aim in this programme is that] if anyone is interested in geoscience in Southeast Asia, they must come here. It will become the centre of excellence for Southeast Asia [in petroleum geoscience].
       How much research is jointly conducted by the petroleum industry and the universities?
       Maroot: Still not much. We would like it to increase. This year we have granted Bt4 million to Chula for researching the Gulf of Thailand and the Andaman sea, and another Bt6 million to support geological research at Khon Kaen and Chiang Mai universities.
       Tara: This master's degree programme is part of our University Partnership Programme (UPP), in which Chevron has worked with 18 universities in 10 countries, including Stanford, Texas A&M, MIT, Imperial College, the India Institute of Technologies and Bandung Institute of Technology in Indonesia. Under this partnership, Chevron supports our personnel from overseas to help teaching.
       It also supports research, provides scholarships, and helps to link and share resources between the universities, such as exchanges of visiting professors. Furthermore, students are able to pursue their studies with real and various geological databases, enabling them to perform practical work once they graduate.
       How do you ensure a quality output from this course?
       Vudhichai: Our personnel. Dr Jo [Joseph Lambiase, the programme's director] is recognised internationally. We trust him. He had a successful experience in setting up a similar course [Lambiase was formerly Brunei Shell Professor of Petroleum Geoscience and Head of the Petroleum Geoscience Department at the Universiti Brunei Darussalam]. We have had to fight and compete against the private sector in search of faculty personnel.
       Tara: We plan to develop Thai instructors. Chevron and PTTEP have committed US$10 million [Bt340.74 million]to support this programme over the next five years.
       Pirom: The university has a determination to forge partnerships with the private sector. In the past we weren't able to produce students who were readying to immediately go to work. [Their employers] had to spare a lot of time for training [newly graduated staff]. This is a dream cooperation for which we have yearned for a long time. I'm very glad.

TEXTING FOR OIL

2009-09-06T04:38:00.000-07:00

       All your contacts are stored in your mobile phone, often with their birthdays and sometimes snapshots too, so you don't have to try to remember them all.
       But even if you have only one car, the length between scheduled services nowadays is so long that you can easily forget when it needs to be done.
       Worse, you forget where the car's service book is and where on the car to look for the sticker listing the recommended motor oil.
       That's why the oil company Chevron (known in Thailand as Caltex) has started a new text messaging service in the UK that can tell any car owner what type of motor oil (Chevron brands only, of course) to use for their car.
       All the confused owner needs to do is text his car's registration number to a an automated system which will text back the appropriate advice. This is possible because the company uses a database from the Department for Transport,so the reply should correctly give your model of car and suitable oils.
       But if a driver has no idea what oil he needs,will he remember the phone number for this service in the first place?
       In my opinion, what would be helpful is a timely SMS alerting you to take the car in for a service, say, seven days ahead of time and, as an incentive, maybe a small discount when you take the car in for its service to the garage that sent you the text.
       That's far better than a car dealer who employs a young lady to call me every six months reminding me of an impending scheduled service, and me wasting my time answering the call.

APPAREL-MARKER SIAM HANDS BRANCHES INTO PTT, JET STATIONS

2009-09-03T20:11:00.001-07:00

       APPAREL-MAKER SIAM HANDS BRANCHES INTO PTT, JET STATIONSSiam Hands, the manufacturer of apparel under the Tangmo brand, is expanding by setting up new retail outlets at PTT petrol stations nationwide.
       This is the first time that the company has decided to aggressively expand its retail shops. Previously, Siam Hands mostly distributed its products through wholesalers and only had five outlets in Thailand, including three in Bangkok, at CentralWorld, Siam Square and Bang Lamphu Department Store.
       The company's managing director, Amara Puangchompoo, said Siam Hands' priority was to attract new entrepreneurs, not increase sales revenue alone.
       She said Siam Hands was allowed to lease space at PTT petrol stations, especially at the Jet terminals recently bought up by PTT because they had larger areas available.
       "PTT has about 1,400 petrol stations nationwide. If we could open an outlet in just 5 per cent of those stations, we will be happy. We plan to have 10 shops set up by the end of this year," she said.
       Two Tangmo outlets have already been set up at PTT petrol stations - one on the Bang Bua Thong-Suphan Buri kilometre 28 and the other on Buddha Mondhol 28.
       Amara said that though Siam Hands has been manufacturing Tangmo brand apparel for both local and international markets, this is the first time that it has chosen to expand its distribution channels. The expansion idea was inspired by the 30 per cent growth brought on by the sale of yellow shirts produced to celebrate His Majesty's 60 years on the throne.
       She said she believes basing outlets at petrol stations would also be profitable because people who go there have more purchasing power. In addition, she said, the Tangmo apparel was targeted at travellers and distinctly different from the brands sold at shopping malls.
       Amara explained that initially the outlets would be franchised to Siam Hands' employees, followed by its 2,000 or so agents before individual investors are given a chance. The initial investment would range between Bt500,000 and Bt1 million, depending on the outlet's size, she said.
       For employees, Siam Hands will first cover the entire investment that can slowly be paid off from the revenue earned. Outlets are expected to make about Bt4 million to Bt5 million a year.
       Siam Hands, which was established more than two decades ago under the name of Original Equipment Manufacturer, initially manufactured apparel for several well-known international brands. She said some of these brands retailed shirts for US$70 (Bt2,400) when they just cost $7 to manufacture.
       "They [the international brands] could charge much more because their brands were well known. So, I thought that I should create my own brand and manufacture good-quality apparel for Thais," she said.
       Though the Tangmo brand is not distributed through shopping malls, its revenue has been rising at a steady rate of 10 per cent every year. On average, the firm spends about Bt10 million annually on promotion, mostly through the print media.
       Previously, Tangmo apparel used to be retailed via large discount stores. However, Amara realised this was not a good channel for her products, because discount stores had far too many conditions for suppliers and that affected the products' prices.
       "We did not belong in discount stores, and I don't mind that shopping malls did not carry our brand. We have been doing well in the overseas markets. For instance, our sales in Japan year-to-date has doubled from the same period last year despite the recession," she said.
       Amara expects the company's revenue this year to increase 5 per cent from Bt1 billion last year, even though she does not expect the new outlets in PTT stations to contribute to the growth.

US$1 TRILLION INVESTMENT NEEDED YEARLY

2009-09-01T20:44:00.000-07:00

       The global energy system needs investment of at least US$1 trillion (Bt34 trillion) per year during the coming decades to mitigate and adapt to the impact from climate change, but only half of that is being spent currently, according to the UN's World Economic and Social Survey 2009.
       "Climate change is not just an environment issue, it is also a develฌopment issue," Noeleen Heyzer, undersecretarygeneral of the United Nations and executive secreฌtary of Escap, said yesterday at the launch of the UN's survey focusing on "Promoting Development, Saving the Planet".
       She said the potential destruction to both social and economic infrastructure requires that a more balฌanced approach be taken to development.
       As is the case with economic financial crises, the countries and communities most vulnerable to the impacts of climate change are also those that have contributed the least to the problem, she said.
       "A warmer world will be a much more unequal world," she said.
       Rich countries should make a concerted effort to cut emissions by shifting to renewable sources of energy, improving energy efficiency and developing green technology, she said.
       Developing countries, for their part, can no longer afford to take the "grow first, clean up later approach".
       Many governments have initiatฌed policies to respond to the threat of global warming, such as promotฌing wind, solar and renewable enerฌgy. The survey, however, warned that policies are lagging behind the scientific evidence.
       "The minimum requirement of investment should be at least $1 trillion per year or $20 trillion by 2030," said Tiziana Bonapace, an econoฌmist at the United Nations Economic and Social Commission for Asia and the Pacific.
       She said that so far no governฌment has fully committed to tackling the climate change issue. She warned that the businessasusual approach will not solve the issue, but it needs a big push.
       While the private sector is concerned only about shortterm gains, it would not invest in clean technology, so the government needs to take the lead by intervening heavily then crowd in private investment later, she said.
       The two experts believe that countries could achieve two seemingly conflicting goals - lowering greenhouse gas emissions while raisฌing the standard of living for the poor through sustainable growth and prosperity for all.
       However, it will be daunting for developing countries that lack the necessary finances, technologies and capacities.

India still hungry for foreign oil

2009-08-31T19:40:00.000-07:00

       India's biggest oil find in decades is now on stream but the country, with its rapidly growing economy, will still be one of the hungriest consumers of foreign crude, analysts say.
       Prime Minister Manmohan Singh turned on the tap at the weekend to start crude gushing from British exploration company Cairn Energy's remote oil field in western Rajasthan state.
       "We dedicate this oil to the nation,"declared Rahul Dhir, head of Cairn's India unit, at the ceremony that underscored the importance the country attaches to energy security to drive economic growth.
       Cairn surprised the world in 2004 with the discovery of the Barmer field in an area written off by Anglo-Dutch giant Shell.
       The field contains some 3.5 billion barrels of oil of which it is technically feasible to recover at least one billion barrels.
       Edinburgh-based Cairn expects the discovery, which lifted it from relative obscurity into the FTSE-100 index of Britain's leading companies, to raise India's oil output by at least 20% based on current production.
       The oil fields will cut India's oil import bill by 7% or $6.8 billion.
       But the increased production, expected to come fully on stream in 2011, will come nowhere near to plugging the crude supply gap in Asia's third-largest economy, analysts say.
       "As India's economy grows, the country is only going to need more oil," said Deepak Pareek, energy analyst at Angel Broking."The Cairn find is a step in the right direction but as demand keeps growing we need to make more similar discoveries to make us more selfsufficient."
       The nation of nearly 1.2 billion people already imports 70% of its oil needs and experts believe that figure will hit 90%by 2030.
       India's fuel thirst has shot up as rising incomes have spurred industrial demand and more people buy energy-guzzling cars and appliances.
       Economic expansion has slipped back to around 6% due to the worldwide slump, but the government hopes to steer the country back to its previous nine percent growth trajectory as soon as the global economy picks up.
       Already among the world's top 10 oil importers, India is expected to become the world's fourth-largest by 2025, according to US government data.
       Oil nowmakes up 31% of India's energy consumption while coal supplies over 50%. Natural gas furnishes about 8% of India's energy needs.
       India's government has made energy security one of its national priorities, as it is unwilling for the country's economic prospects to be dependent on the vagaries of the foreign crude market and sometimes unstable political regions.
       It presented its recent landmark nuclear deal with the United States, which ended its atomic pariah status and gave it access to civilian technology, as a step towards that goal.
       It is also seeking to develop other energy sources such as wind and solar power and has become, along with China,one of the world's most aggressive seekers of foreign oil and gas properties.
       But experts say it will take years for alternate energy forms to have any significant role in supplying India's fuel needs.

A family feud that is threatening Asia's energy needs

2009-08-31T05:32:00.000-07:00

       As the global economy gets back on track after a prolonged period of instability and uncertainty, demand for energy is set to explode, particularly in Asia's export-driven economies. This presents challenges for Asia, and particularly countries such as Thailand.Stable and reliable sources of energy are the lifeblood of thriving economies.Asia would do well to ensure that its regional supplies are secure and attractive to investors.
       Consider Thailand, whose hunger for natural gas is immense, with imports doubling since 2004. Thailand imported 9.8 trillion cubic metres of natural gas in 2007(the latest available numbers)making it the 5th largest importer within Asia. This represents a 30% increase from 2006. And those import demands are rising still more.
       The demand for energy by Asia is so pronounced it has prompted some nations to seek complex energy deals in volatile and unsavory regions of the world, particularly resource-rich nations in Africa and the Middle East. This is not a sustainable or advisable strategy for the long term.
       Instead, it is important that Asian nations maximise the resources in their own backyards. North Asian countries such as Mongolia are trying to develop more of their geological endowments.And India holds great potential to emerge as a major Asian energy force, provided it can overcome some of the short-sighted views of its business oligarchs.
       India could be a major source of gas for the broader Asian market, including Thailand. A huge gas discovery in India's massive Krishna Godavari basin could well transform the country and the region.
       The development and production of gas from this field, made possible with an investment of about US$6.5 billion (220 billion baht), is India's first. It is also one of the world's most complex deep-water fields - with the gas lying 3,000m under the sea bed in extreme weather conditions - and was completed in a record time of less than seven years from discovery.
       There are very few gas fields of such depth and complexity in the world which have reached the stage of production.Already in less than six months of its life, it is producing 36 mmscmd (million metric standard cubic metres per day)of gas, which is an achievement with few parallels in the global E&P industry.At full capacity this field holds the potential to satisfy many of India's and the region's increasing gas needs. And there are other areas of India, such as throughout the Bay of Bengal, that are ripe for exploration.
       But business bickering in Mumbai threatens the expansion of the Indian sources. Two of the world's wealthiest men, the Ambani brothers, Mukesh and Anil, have locked horns in a battle over the price and distribution of Indian gas.If Indian gas development gets bogged down in a family feud, it will undermine Asia's broader energy needs.
       Here is what has happened. The Ambani brothers control the legacy assets of Reliance Industries, the highly successful industrial conglomerate built by their late father. Mr Mukesh controls the gas that can be developed in the Krishna Godavari basin, the market price of which is set at $4.20 per MMBTU (million British thermal units).
       Mr Anil is suing his brother, demanding he hand over gas supplies at roughly half the market price. The reason? A family agreement, brokered years ago by Mr Mukesh and Mr Anil's mother,stipulates that Mr Mukesh hand over gas to his brother to power his electricity business at below-market rates.
       There are two major problems with Mr Anil's demands.
       The first is the power plants to be fired by the gas don't exist - Mr Anil hasn't built them. So he is demanding gas his company can't use.
       The second reason is Indian law. The Indian government has developed a sensible policy to encourage the distribution of its gas. Its gas utilisation policy stipulates that gas "consumers should be in a position to actually consume gas as and when it becomes available". These measures are to prevent the development of excessive reserves and gas hoarding.
       Handing gas over to Mr Anil at half the market price so he can simply resell it on the market adds no value to Indian consumers or to Indian public coffers.And it does nothing to help long-term energy investment in India which is vital to meeting Asia's rising energy needs.Indeed, the legal uncertainty spooks investors who wonder why they want to plough capital into a market plagued by such nonsense.
       It should be embarrassing that a country as strategically important as India has its energy future held hostage by the petty manoeuvrings of one of its richest men.
       The good news is the Indian Supreme Court has agreed to hear the case, something it will do tomorrow. One reason for having an independent judiciary is so that an impartial bench can weigh the interests of an entire people to make sure those interests are not trampled by the narrow interests of a powerful few.
       The Indian Supreme Court can send a powerful message to global energy investors next week - that the old way of doing business in which family ties take precedence over markets and the public interest is over, and that a modern India is a safe place to invest. This will be a victory for India, for Asia, and for a thriving Asian economic region.
       The author is a global energy consultant who worked for 25 years with Unocal, an international oil and gas company, which made the first gas discovery in Thailand.

BCP aims to lift foreign limit

2009-08-28T20:33:00.000-07:00

       Bangchak Petroleum Plc (BCP) will propose extending its foreign shareholding limit to 20% from 10% now to facilitate conversions by holders of the company's depository receipts.
       Patiparn Sukorndhaman, a senior executive vice-president, said the company would propose that shareholders approve the amendment to its articles of association on Sept 24.
       "Extending the foreign limit will increase our trading liquidity and appeal in the market," he said. The higher limit will ease share conversions by holders of Bangchak-DR1 depository receipts.
       Bangchak executives also told investors yesterday that an employee joint investment programme would belaunched on Oct 1. Employees may allocate up to 5% of their monthly salaries to invest in Bangchak stock, with Bangchak matching contributions of up to 7.5% of each member's salary. The funds will in turn be invested in Bangchak common stock or depository receipts.
       Up to 900 employees are expected to join the programme.
       Bangchak also plans to invest 4-5 billion baht in new ventures over the next five years, including natural resources,upstream petrochemicals and logistics,he said. It hopes the new businesses will eventually contribute up to 30% of total revenue and reduce the company's sensitivity to oil price fluctuations.
       While the new business ventures would be financed from internal cash flow, Bangchak would continue to look for opportunities to raise funds from the bond market, said Mr Patiparn.
       "Last year, we were rated BBB+ by Tris Ratings. We will be re-rated again once the PQI project is done," he said.
       The $378-million product quality improvement (PQI) project will help convert fuel oil into higher-value products, and lift Bangchak's refining capacity from 80,000 barrels per day to 100,000 by the end of the year.
       BCP shares closed yesterday on the SET at 14.4 baht, up 10 satang, in trade worth 102.38 million baht.

Oil prices hover near $73 in Asia as Wall Street reverses

2009-08-28T20:31:00.002-07:00

       Oil prices rose moderately yesterday in Asia, hovering near $73, extending the previous days ra lly as the market was buoyed by a strong perfor mance on Wall Street and a weakening US dollar.
       Benchmark crude for October delivery was up 32 cents to $72.81 a barrel by late morning Bangkok time in electronic trading on the New York Mercantile Exchange. The contract Thursday added $1.06 to settle at $72.49 after tumbling from near $75 earlier in the week.
       Reflecting the dire state of energy demand, natural gas prices slumped to their lowest level in seven years Thursday after the US government reported that salt caverns, aquifers and other underground areas where it is stored are filling up. Levels of natural gas have been building because power-intense industries like manufacturing have cut back severely on production.
       Crude posted gains because of a fall in the dollar which means investors can get more crude for less money.
       Yet some analysts say the oil price is bound to fall in coming weeks as earlier euphoria about the global economy emerging from recession gives way to doubts about how sustainable the recovery is. Existing weakness in demand will also be exacerbated by the seasonal drop in gasoline consumption when the US summer dr iving season ends in a few weeks time.
       We have seen this strength (in the oil price) which reflected renewed confidence in the economy, said John Vautrain, energy analyst at consultancy Purvin & Gertz in Singapore. But in the last week or so people are starting to say that the stock market is overbought and the data is not that good.
       In other Nymex trading, gasoline for September delivery was up 0.46 cent at $2.036 a gallon and heating oil rose 0.2 cent to $1.8612 a gallon.
       In London, Brent crude was up 17 cents at $72.50.
       Wall Stre ets blue-chip Dow Jones Industrial Average rose 0.39% to 9,580.63 points, ending higher for an eighth straight session and extending its longest winning streak in 28 months.
       There were also gains on the techheavy Nasdaq and the Standard & Poors 500 index. Oil got support from a weaker dollar, which makes dollar-priced crude cheaper for buyers using stronger currencies and therefore tends to stimulate dem and and lift prices.
       The New York contract jumped to $75 on Tuesday for the first time in 10 months after strong US consumer confidence data, but fell back on profit-taking after failing to break through that key barrier.
       Oil lost more ground on Wednesday after official data showed a surprise jump in crude inventories in the United States,the worlds biggest energy consuming nation.

LUKOIL"S PROFIT FALLS 56% AS FUEL PRICES DIP

2009-08-28T20:31:00.001-07:00

       Russia's largest private oil firm, Lukoil, yesterday said its profits plunged 56 per cent in the first half amid plummeting crude prices.
       Net profits fell to US$3.2 billion (Bt109 billion)from $7.29 billion in the first half of 2008, the Moscow-based firm said in a statement. Sales fell 39 per cent to $34.9 billion.
       For the second quarter alone, Lukoil reported profits down 44 per cent at $2.32 billion, with sale tumbling 37 per cent to $20.1 billion.
       Lukoil, Russia's second-largest oil producer, has been hard hit by the dive in oil proces, which are now hovering around $70 per barrel compared to record highs above $147 last year.
       Analysts polled by Dow Jones Newswires had forcast a $1.76-billion net profit for the second quarter.
       "Measures to increase the effectiveness of our activity put in place at the start of the year have allowed us to successfully overcome the difficult macroeconomic situation and preserve a positive cash-flow," Lukoil said.
       Lukoil is 20-per-cent owned by US oil giant ConocoPhillips.

Incentives reviewed to attract HQs

2009-08-27T19:18:00.000-07:00

       The government is reviewing investment incentives to make Thailand more attractive as a location for regional headquarters than its neighbours.
       Prime Minister Abhisit Vejjajiva announced the initiative - without providing details of new privileges - while presiding over ExxonMobil's celebration of the sixth anniversary of its Bangkok Business Support Centre.
       The unit runs the oil group's administrative functions such as payroll, training and retail business support for AsiaPacific. The centre's staff have increased over six years from 600 to 2,000.
       ExxonMobil was the first company to gain Board of Investment (BoI) privileges under the regional operating service (ROS) establishment scheme, which assists with work permits and import duty on machinery.
       Hiranya Suchinai, an adviser to the BoI, hopes to see more companies being attracted by enhanced privileges to build their regional centres in Thailand.
       Last year,20 projects worth 1.06 billion baht sought privileges to set up regional offices here. In the first seven months of 2009, BoI has received nine requests with a value of 161 million baht.
       Daniel Lyons, chairman of the board of directors, said ExxonMobil had chosen Bangkok for its backup office for business in Southeast Asia because of the country's infrastructure and the company's long experience of operating here.
       But the company has no plans to expand its business in Thailand, largely because Esso (Thailand) Plc, Exxon's Thai unit, is unsure of the outlook for the oil refinery and petrochemical industry in the second half of the year, he said.
       "Oil stock gains in the first half helped us [to improve results], but in the latter half, with the global economic recovery outlook being gloomy, we are uncertain of the business direction and unable to estimate," said Mongkonnimit Ueachoetkun, public relations manager for Esso Thailand.
       Shares of ESSO closed yesterday on the Stock Exchange of Thailand at 7.35 baht, down 20 satang, in trade worth 105.65 million baht.

Bangchak to invest up to Bt4 billion in non-oil business

2009-08-27T19:17:00.000-07:00

       Bangchak Petroleum plans to invest Bt3 billion to Bt4 billion over the next three years in non-oil businesses, such as natural resources and logistics.
       Patiparn Sukorndhaman, senior executive vice president for accounting and finance, yesterday said Bangchak could decide to take over companies or invest in the establishment of new ones.
       The investment models are under study, and the company is in talks with prospective targets.
       "We'll finance the investment through cash flow. We have enough cash for this. Our policy is we won't borrow to finance the investment in new business areas," Patiparn said. "A clearer picture of the new businesses should be available in the next quarter."
       Bangchak hopes the new business areas will account for 30 per cent of earnings before interest, taxes, depreciation and amortisation (ebitda) over the next five years.
       Meanwhile, in the oil business, Bangchak plans to spend about US$30 million (Bt1 billion) on upgrading the quality of its petrol to meet the Euro-IV standard next year. The amount is not included in the company's annual investment budget of Bt700 million.
       Bangchak's diesel products already comply with the standard.
       Patiparn said the company's ebitda this year would likely reach Bt10 billion if global oil prices remained around $70 per barrel. It also estimates the base gross refining margin, including hedging, to stay at $10 per barrel in the second half based on the oil-price estimate.
       Bangchak earlier targeted ebitda of Bt8 billion this year.
       "I believe global oil prices will not swing sharply in the second half, due to the world economic sentiment. So, Bangchak's ebitda will possibly reach Bt10 billion this year," he added.
       He said Bangchak would resume its Product Quality Improvement project next month after shutting down the hydrocracking unit, a part of the project, in May.
       After the resumption, the company will increase its refining capacity to 100,000 barrels per day in the fourth quarter, while full-year capacity on average could be 89,000bpd.

Looking to fill the generation gap

2009-08-26T19:30:00.000-07:00

       Bas, a Grade-12 student from Bangkok, has a dream to establish a green guesthouse with a "vertical garden".Dew, from northern Thailand, plans to set up separate bins for recyclable materials at his Assumption Lampang School.
       Tiffany, a high school girl from the US,is thinking seriously about how much energy she uses in her everyday life, and Piotr, from Poland, considers, for the first time, the pros and cons of nuclear energy.
       These children come from different parts of the world, with different backgrounds and cultures. But they are now sharing the same goal - to help save energy and improve the global environment.
       Their inspiration was participating in the Toshiba Youth Conference for a Sustainable Future 2009, held between Aug 1 and Aug 7 in Kamogawa and Yokohama,Japan.
       Hosted by the Toshiba International Foundation, the conference brought together 27 high school students and 10 teachers from Thailand, the US, Poland and Japan to explore ways to achieve a sustainable society by focusing on not only energy conservation, but also sustainable energy resources.
       With its theme to halve CO2 emissions by 2050, the week-long conference encouraged the young participants to think about how they could introduce new energy practices to their own towns and communities, what would be the best mix of energy resources and what they could do individually to achieve a sustainable energy society. Discussions were also held on the shift from oil- and coal-based energy to that of natural gas and nuclear power.
       Fumihiko Namekawa, president of the Toshiba International Foundation, explained that the programme mainly involved younger people because children are the future.
       "Children are a large part of society that can make things happen or not happen.If they don't get started, nobody will. In 20 or 30 years, today's children will hold important positions in organisations and society. If we implant the right attitudes now, in the future they may come up with environmental-friendly policies or projects for their communities," he said.
       He said the idea of an environmental camp was developed because the issues are still not being addressed by the younger generation. High school students are the target because this kind of programme is still rare for them.
       This year's conference was only the second.Last year, the focus was on energy consumption, this year it was energy supply. In coming years the foundation hopes to address other environmental issues such as global warming,water safety, air pollution and food safety.
       The sustainable programme for a sustainable society
       Mr Namekawa said the conference itself is sustainable. The same schools will be chosen to participate for three consecutive years,during which time the teachers will remain the same, while students take turns each year to attend. Selected schools will be consistently engaged in environmental activities.
       "The conference is just a one week camp,but afterwards we expect the children to educate their communities," Mr Namekawa said."The first three years are like pilot projects during which we will try various methods and options. After three youth conferences,we want to establish standard ways to implement this programme for 10 or 30 years and beyond."
       Getting all the kids involved
       Designed and operated by BeGood Cafe, a Japanese non-profit organisation working on environmental issues, the conference got all participants to have their say despite their different cultures and backgrounds.
       The American and Polish kids are more confident and outspoken, while the Thai and Japanese students are quieter, and having language barriers to overcome.
       However, all of them could finally communicate thanks to the four camp rules - speak out, respect others, be active and be creative.
       Before the conference, students were given pre-camp assignments to investigate environmental problems in their own communities and share their knowledge on the designated website, act-eco.net, in order to build common understanding with other participants.
       The camp kicked off at Josai Awa Kamogawa Learning Centre in Chiba, surrounded by mountains and sea, to allow the children a chance to be close to nature. After some team-building activities to help the students overcome cultural and language barriers, participants were engaged in discussions to find common perspectives and identify goals in which they can work together.
       The crucial part of the programme is exercises for students to conduct interviews and research as journalists. The end product was a newspaper called Act Eco Journal , where students worked in groups to write articles about their findings and opinions towards each camp activity.
       After returning to their home countries,the students had post-camp assignments to share their experiences with others. They were to take some concrete action in their own communities and share their achievements with other participants via the website in order to continue to learn from each other.
       The lessons learned
       The programme offered many highlights that captured the students' attention.
       Starting with the camp routines, there was a rule restricting participants to take a bath only once a day to save water. And each student was given chopsticks which they were told to carry to use for every meal.There was one evening where they experienced dinner with light from a solar lantern.
       The visits to some ecological communities and interviews with Japanese people who chose to live a sustainable life outside the city taught the children about the true happiness of living a simple life.
       The young participants were impressed by a man, Mr Hayashi, who lives in a home made of natural and local materials, and another man called Mr Yoshida who quit his busy, urban life to live in a self-sustaining community. Both men do not own television sets and also grow their own vegetables.
       "It requires time and great effort to live a sustainable life. It's not something everyone can do, and I feel that their courage to live such an extreme lifestyle is remarkable,"said Songyi Ee, from the US High School for Environmental Studies.
       Yestrial Henriquez, from the same school,said the programme inspired her to think of adjusting her own lifestyle.
       "Something happening in the US could affect the other side of the world. The best solution is to start off small, beginning with ourselves, to make a change," she said.
       In another visit to a Mizuta residence, a traditional Japanese home built using natural sources such as wood, earth and bamboo,the students learned about the traditional wisdom that provides solutions for problems Japanese people faced.
       For example, the wooden pillars helped see the house through many earthquakes,and the roof made of grass protected the home from heat, rain and cold.
       A study tour to the Toshiba Science Museum showed the company's continuous effort to develop sustainable technology, such as erasable ink, the replacement of old incandescent bulbs with LED ones, and a new battery called a "Direct Methanol Cell"that lasts for 20 hours with less energy loss.
       Wiphada Det-Amnatkul, the Thai delegate from Triam Udom Suksa School, said she was very much impressed with the erasable ink, which allows paper to be reused.
       "Homes and offices use and throw away tonnes of paper every day. But this ink, which disappeared when it was heated, offered a better solution than just recycling the paper,"she said.
       Another group tour to Isogo Nuclear Engineering Centre, meanwhile, introduced nuclear energy as an alternative source of energy to replace fossil fuels.
       Though agreeing that nuclear is the most realistic solution for the current energy crisis,many young participants questioned the safety of collecting and disposing of nuclear waste.
       "If our technology is well developed to tackle those hazardous wastes, maybe we can make full use of nuclear energy," said Naoki Matsumoto, from Waseda University Senior High School, Japan.
       As for how to achieve a sustainable future,one group of participants wrote in their Act Eco Journal :"A mix of energy sources solar, wind, geothermal and nuclear energies,is the only way to go."Having only the solar,we would be helpless on a cloudy day or in the night. The wind turbines won't work in a windless area, and geothermal energy is restricted only to few areas. The path we should follow is mixing those energies together. They all should be used in a terrain and climate that is the best fit for each one."

Australia approves massive gas project

2009-08-26T19:29:00.001-07:00

Oil prices hover above $72 in Asia amid demand concerns

2009-08-26T19:28:00.000-07:00

       Oil prices hovered above $72 a barrel yesterday in Asia after tumbling more than 3% overnight,weighed down by concerns over slowing demand in the United States,the worlds largest energy consumer.
       Benchmark crude for October delivery was up 43 cents at $72.48 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.
       Prices briefly touched $75 a barrel Tuesday for the first time in 10 months,buoyed by new signals of rising US consumer confidence, but fell back to settle at $72.05 after a new report from Washington projected a cumulative $7 trillion US deficit for the next decade.
       New data on weak energy demand added further pressure on pricing.
       Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore,said a report by the American Petroleum Institute showed a substantial gain of 4.3 million barrels in crude oil inventories for the week ended Aug 21.
       The US Energy Department will release its weekly inventories data yesterday. For the previous week, crude stocks fell 8.4 million barrels, according to that data.
       The buildup in stockpiles was largely due to the delivery of crude oil imports that were delayed earlier, and this may further increase due to seasonally lower demand for gasoline as the summer holidays end, he said.
       The momentum in the oil rally has certainly been broken. We are seeing a well-deserved correction right now and could see oil prices fall below $70 a barrel in the coming weeks, Shum said.
       Energy prices have risen sharply this year, riding on a rally in equity markets mostly on the belief that the global economy is improving and demand will rebound soon.
       In other Nymex trading, gasoline for September delivery gained 0.76 cent to $2.0172 a gallon and heating oil added 0.76 cent to $1.8635 a gallon. Natural gas was little changed at $2.881 per 1,000 cubic feet.
       In London, Brent crude rose 43 cents to $72.25.
       The New York-based Conference Board provided a bit of good news Tuesday when it said its Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July. Still, the index is well below 90, the minimum level associated with a healthy economy.
       Shum said the pull back in oil pricing was in contrast to gains in stock markets. The Dow Jones industr ial average rose 0.3% Tuesday and most Asian markets advanced yesterday. Oil has often looked to the perfor mance of equities as a gauge of economic optimism and therefore crude demand.
       If oil decouples from the linkage with equities and gives in to weak fundamentals, we could see continuos correction in oil pricing, Shum said.

Australia gives massive natural gas project the green light

2009-08-26T19:27:00.000-07:00

       Australia yesterday approved a massive energy project that will supply natural gas worth tens of billions of dollars to China and India, giving new impetus to its resources boom.
       Environment Minister Peter Garrett imposed 28 conditions to protect wildlife but said he saw no reason to block the Gorgon liquefied natural gas (LNG) plant off Western Australia, removing its final regulatory hurdle.
       The project is a joint venture by Chevron, Shell and ExxonMobil, which has signed a record US$41 billion contract with Chinese giant PetroChina Co and another worth $21 billion with India's Petronet LNG Ltd.
       "I've considered it very carefully, I don't believe that there will be unacceptable (environmental) impacts and,as a consequence of that, I have made my decision today," Garrett said.
       The Gorgon field, thought to hold more than 40 trillion cubic feet of gas, is expected to create thousands of jobs and pump billions of dollars into Australia's economy.
       Chevron, majority partner in the project, welcomed Garrett's approval and said a final investment decision on the yet-to-be developed plant would be made in the coming months.
       "The Gorgon project is Australia's largest single resource project and is set to deliver significant economic benefits and create around 10,000 indirect and direct jobs during peak construction,"said Roy Krzywosinski, the company's Australian managing director.
       He said the plant was "globally and nationally significant", with an economic life of at least 40 years, adding it had been sited to minimise environmental impact.
       Trade Minister Simon Crean said the deal was a major boost to Australia's profile as a green energy provider and proof China saw it as a key partner in its growth.
       "This is a commitment by China to a long-term contract. They see Australia as part of its energy supply, but not just any energy - clean energy," he told reporters."The trade relationship with China continues to grow very strongly.The recent gas deal, there's a huge case in point."
       Intense demand from the emerging economies of China and India for resources has underpinned a period of stellar growth for Australia's mining and energy sectors.
       Trade with Beijing, the world's largest consumer of iron ore and coal, was worth US$58 billion last year alone.
       Australia is the world's seventh-largest exporter of LNG and Chevron said the Gorgon project would secure Australia's position as a leading gas producer and generate a new source of wealth for the resource-rich nation.
       According to trade officials, demand for LNG far exceeds supply and it is seen as the oil and gas industry's greatest growth area, particularly as customers look for cleaner energy sources.

Auto-makers join Energy Ministry's B5 promotion

2009-08-25T21:41:00.001-07:00

       Thirteen auto-makers have joined the Energy Ministry to promote use of B5 diesel throughout Thailand.
       Energy Minister Wannarat Charnnukul told a recent media conference the ministry's Energy Business Department had been striving to improve the quality of biodiesel, which was mixed with ordinary diesel fuel to produce B5 diesel.
       He said these efforts had taken effect on August 15 and that he was asking the automakers for confirmation that B5 diesel was of sufficient quality to meet with their approval, in order to create confidence among consumers and promote the use of B5 fuel.
       There are now two types of biodiesel fuel on the market: B2 and B5. Sales of B5 are now 24 million litres a day, or about half of all diesel consumption, up from only 11 million litres a day, or 23 per cent of diesel consumption, a year ago.
       Wannarat said promotion of B5 had been successful "to a certain extent" and that the ministry's policy was to have only one grade - B5 diesel - in use throughout Thailand by 2011.
       "The ministry's policy is clearly to promote alternative fuels, and the next step is to encourage more people to use B5 fuel. If everyone uses B5, then we could lower oil imports 5 per cent, save Bt17 billion per year and help our farmers at the same time," he said.
       Among the auto-makers supporting the B5 drive are the BMW Group Thailand, General Motors (Thailand), Chevrolet Sales (Thailand), Ford Sales and Service (Thaikand), Hino Motors (Thailand), Hyundai Motor (Thailand), Tri Petch Isuzu Sales, Mazda Sales (Thailand), Mercedes-Benz (Thailand), Mitsubishi Motors (Thailand), Nissan Motor (Thailand), Toyota Motor Thailand, Volvo Car (Thailand) and Volvo Truck and Bus (Thailand).

PTT embraces SCM system

2009-08-25T21:39:00.002-07:00

       PTT Plc plans to improve its cost controls to be more efficient by implementing a supply chain management system (SCM),which will be used for linking all related company parties under one roof, said president and chief executive Prasert Bunsumpun.
       Mr Prasert said this was part of its strategic plan that focuses on integration in production, inventories, logistics, procurement and trading activities among its businesses, and it aims to complete system installation in the next three years.
       The group's businesses include oil refining, exploration and production,and distribution for natural gas as well as petrochemicals.
       "As these businesses are all related to energy, it is crucial to create synergy among the group in many aspects. A supply chain can help the company reduce costs and waste," said Mr Prasert.
       "For example, with the new system you will see our quarterly results reports within a week instead of wasting time and personnel for three weeks to complete them as currently happens."
       Its olefins arm, PTT Chemicals (PTTCH), was the first to invest in the system in 2007 with a commitment of 100 million baht. Mr Prasert declined to give the exact amount it saved, but said the amount for logistics was immense,that it may break even on its investment in one year, and that it is one of the most efficient companies in Asia.
       Last year PTTCH traded 500,000 tonnes of polymers through its new system and that should increase to 1.5 million next year and 2.2 million a year later.
       "We can monitor our product from oil or gas well to platform, until the final product is handed over to either corporate clients or motorists who fill their tanks in PTT service stations.
       This gives the company a quicker read on what products clients actually use,data that can be used for its production plan.
       "If we know real demand before hand,we can serve demand as if custom-made,making this the most effective way to cut inventory cost," said Mr Prasert.
       The system also allows the company to monitor waste and loss throughout the supply chain, so that it can solve the problem at the root.
       Mr Prasert predicts that within a few years, the PTT group will surpass other players in cost management in Asia.
       "In the second half of this year new olefins crackers in the Middle East will start production, and while production costs are low, applying the SCM system means we can compete with other newcomers," he said.
       He said there were other chemical producers in the PTT group that had yet to use SCM, and it would seek ways to link systems between similar businesses such as the petrochemical unit of Thai Oil, IRPC and PTT Aromatics and Refinery Plc connecting with PTTCH.
       Prajya Phinyawat, the senior executive vice-president for petrochemicals and refining, said the oil and refinery businesses would install the system first as the group now operates more than 50 oil and refinery sites.
       "The oil and refinery business alone should save around 300-400 million baht per year after SCM is complete," said Mr Prajya.
       Shares of PTT closed yesterday on the Stock Exchange of Thailand at 247 baht, up 3 baht, in trade worth 1.45 billion baht.

Oil falls below $74 in Asia as stocks retreat

2009-08-25T21:39:00.001-07:00

       Oil prices fell below $74 Tuesday in Asia, taking a cue from weak stock markets and expectations the end of the summer driving season in the US will sap already weak demand.
       Benchmark crude for October delivery was down 50 cents to $73.87 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.
       Nearly all regional stock markets were lower yesterday, providing a negative lead for the oil market which often looks to the performance of equities as a gauge of economic optimism and therefore crude demand.
       Oil approached $75 a barrel Monday for the first time in 10 months amid optimism that the worlds economies are on the mend but fell back to settle at $74.37, up 48 cents on the day.
       Expectations that demand for energy will grow, at least for oil and gasoline,were spurred by Federal Reserve Chairman Ben Bernanke, who said Friday the recession-hit US economy is reviving. Bernankes remarks and signs of improvement in the US housing market sent stock markets higher, and that carried over into the new week.
       Despite the optimism about recovery from recession, analysts say energy demand remains in the doldrums and seasonally lower demand for gasoline as the summer holidays end will exacer-bate that weakness.
       Oil at the $70-plus level remain potentially vulnerable because there is little constructive fundamental support,inventories are high and global demand remains weak, said Vi ctor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.
       In my view, oil prices will likely give in to the fundamentals in the coming week. Seasonally, oil demand is lower in autumn, so reduced demand in the shoulder season may put further pressure on oil.
       In other Nymex trading, gasoline for September delivery fell 0.91 cents to $2.04 a gallon and heating oil was down 2.15 cents to $1.9020 a gallon. Natural gas fell 2.6 cents to $2.897 per 1,000 cubic feet.
       In London, Brent crude was down 64 cents at $73.62.
       Mondays pr ice gains ... could be interpreted as rather impressive given the strengthening in the US dollar and a drop in the equity markets, said ODL Securities analyst Marius Paun in a note to clients.
       Ro bust sentiment on (a) global economic recovery still provides strong support for the energy complex, especially after both (US) Fed Chairman Ben Bernanke and ECB President ( Jean-Claude) Trichet talked about signs indicating the world economy has bottomed.

PTT TO SPEND BT1 BN ON SUPPLY-CHAIN MANAGEMENT

2009-08-25T21:37:00.000-07:00

       PTT will spend Bt1 billion over the next three years to install a supply-chain management (SCM) system that will oversee logistics for all of its business units, suppliers and customers.
       "Our SCM will emphasise real-time information, thus increasing our efficiency. This will support PTT's quest to become one of the top 100 companies on the Fortune list within five years," said president and CEO Prasert Bunsumpun.
       He said the system would manage production and shipment to customers, decreasing operating costs and increasing customer satisfaction in the process.
       Driving the investment will be the successful SCM of its polymer operations, which involve subsidiaries PTT Chemical, PTT Polymer Marketing, PTT ICT Solutions, PTT Polymer Logistics and Bangkok Polyethylene.
       This will be expanded during the three-year period to include the petrochemical, oil and natural-gas operations.
       Prajya Phinyawat, president for refining operations at PTT, said SCM would reduce annual business expenses by Bt300 to Bt400 million.
       PTT Chemical president Veerasak Kositpaisal said that even though an SCM system for polymer operations would cost Bt100 million, it would break even within a year.
       Transportation costs would drop to US$50 (1,700) per tonne, or only 5 per cent of total cost.
       Within two years, the system would be applied to other petrochemical products for an additional cost of Bt100 million.
       Veerasak said logistics costs amounted to 19 per cent of gross domestic product at present, making Thailand less competitive than other countries. Spending on logistics is thus important for the PTT Group, particularly in the petrochemical industry, where more than half of output is exported.
       He said the export ratio would rise following installation of the SCM system, particularly after PTT Chemical's capacity expanded by 1 million tonnes late this year as scheduled.
       "Comparatively, PTT's chemical business competes well with naphtha-based plants abroad, which account for more than half of all chemical plants. However, we're less competitive with Middle East factories, whose products will hit the market late this year. SCM will thus be expanded to cover other segments to reduce management costs," Veerasak said.
       He also believes PTT Chemical's financial results will improve further. The company posted a second-quarter net profit of Bt2.1 billion, against a net loss of Bt400 million in the first quarter. He attributed the improvement to measures to counter the economic crisis that were implemented late last year, involving cost and cash management as well as SCM.
       However, he admitted some risk factors remained in the second half, due to new supply from the Middle East.

Daewoo consortium in Burmese gas deal

2009-08-25T21:36:00.000-07:00

       A consortium led by South Korea's Daewoo International would invest about $5.6 billion to develop Burmese gas fields as part of a 30-year natural gas supply deal with China, a group member said yesterday.
       The investment comes just a week after China signed a $41 billion liquefied natural gas import deal with Australia,underscoring its strong appetite for a broad range of commodities from gas and uranium to iron ore and coal.
       The Burmese gas development plan,which has been mooted since 2004, will allow the consortium to supply natural gas to China's top state oil and gas firm,China National Petroleum Corp (CNPC),with a peak daily production of 500 million cubic feet, or about 3.8 million tonnes annually.
       The supply, due from 2013 from the Shwe and ShwePhyu fields in Burma's A-1 offshore block and Mya field in A-3 offshore block, amounts to around 7%of China's current gas consumption of 7.3 billion cubic feet per day, which is expected to grow rapidly.
       Currently meeting only 3% of China's total energy needs, gas use is set to grow at a 10% compound annual rate to 18 billion cubic feet per day by 2020, according to Bernstein Research, transforming China into the third largest single market after Russia and the United States.
       Daewoo has a 51% stake in the consortium and the other shareholders are India's Oil and Natural Gas Corp with 17%, Myanmar Oil & Gas Enterprise with 15%, India's GAIL with 8.5%, and Korea Gas Corp with 8.5%.
       "Daewoo will spend 2.1 trillion won ($1.68 billion) in initial investment for five years until 2014 and KOGAS would spend $299 million," the two firms said in separate statements.
       A KOGAS official said total investment by the consortium would amount to about $5.6 billion, including $4.6 billion in initial spending.
       The consortium will undertake production and offshore pipeline transportation, while land transportation to China will be jointly managed with China National United Oil Corp (CNUOC).
       The investment still needs approval from the army-ruled Burmese government, and CNUOC has yet to decide details of its investment for land transportation to China.
       Chinese media have said the consortium and CNUOC planned to build oil and gas pipelines through Burma and into China's southwestern Yunnan province, bypassing the long journey around the Malacca Strait.
       Burma will also be able to tap the pipeline running across its territory to promote economic development once the gas starts flowing.
       Few Western companies will invest in Burma because of its poor human rights record and continued detention of Nobel Peace Prize laureate Aung San Suu Kyi, which has led to a broad range of U.S. and European sanctions.
       China, typically wary of supporting or imposing sanctions and one of Burma's few diplomatic allies, has shown no qualms about investing in its neighbour, eager for its natural gas, oil, minerals and timber to feed a booming economy.

YOUTHS URGED TO JOIN ENERGY COMPETITION

2009-08-25T21:35:00.000-07:00

       Bangchak Petroleum is extending its alternative-energy contest for the third year and has reaffirmed its leading role as a promoter of alternative fuels.
       Its chief goal is to persuade youngsters to join the effort to tackling global warming.
       Under the theme of "Towards the Goal of Thailand as Asia's No-1 Player in Alternative Energy",the project has been launched with cooperation from the Office of the Basic Dducation Commission.
       Winners stand to reap Bt2 million worth of prizes.
       "In this year's contest, youths must answer how biodiesel and gasohol can alleviate our economic problems and reduce the danger of global warming," said Bangchak president Anusorn Sangnimnuan.
       "We believe this project could disperse knowledge about alternative energy among 1.5 million youths.
       "After the project comes to a close, the ideas submitted will be sent to the Energy Ministry, to show that Thai youths are aware and taking part in the nation's efforts to be a leader in alternative energy."
       Each year, Bangchak mobilises support from more than 200 employees to promote knowledge om niodiesel and gasohol, which have gained popularity in other countries, as well.
       "Some countries with advanced technology are stepping up efforts to obtain support from a new generation.
       The moves are aimed at using non-food materials like single-cell seaweed for biodiesel and plant cellulose for ethanol.
       "Leading economies in the 21st century should excel in the field of clean energy," Anusorn said.
       Bangchak now consumes 200,000 litres of ethanol a day in offering gasohol products to Thai consumers.
       Thailand's biodiesel and gasohol consumption accounts for 4.3 percent of total energy use.
       If consumption reaches 15 per cent,Thailand can save up to Bt100 billion by reducing oil imports.
       This will ensure energy stability and help both the environment and farmers.
       Ther contest is now seeking participants from high-school students nationwide.
       They can express their ideas through exhibition boards.
       Students from more than 3,000 schools have been invited to take part and sign up between next Sunday and October 20.
       For more information, visit www.bangchak.co.th.

       If consumption reaches 15 per cent, Thailand can save up to Bt100 billion by reducing oil imports.

       A POSTER from Bangchak Petroleum urges students to join its competition seeking innovative energy ideas and promoting biodiesel and ethanol fuels.

IRPC gives up on refining business

2009-08-25T21:33:00.000-07:00

       IRPC Plc, a petrochemical manufacturer and oil refiner affiliated with PTT Plc,has decided to focus solely on the petrochemical business now that the increasing popularity of alternative fuels has dimmed the prospects of its refinery.
       "We've decided to move ahead to achieve our goal of being a leader in integrated petrochemical business. The refining unit will still be running only to serve our petrochemical units," said chief executive Pailin Chuchottaworn.
       Dr Pailin pointed out that IRPC's business strategy needed to be improved as part of its plan to rehabilitate the company's performance, which has underperformed in recent years.
       Atikom Terbsiri, senior executive vice-president for corporate strategy planning, said the refining industry was facing sluggish demand and a surge in supply, clouding the outlook of the industry.
       Factors curbing the demand include the global economic slump and the fast adoption of alternative fuels to replace conventional fuels, estimated to reach 20% in the future. Furthermore,large refinery players are entering the global market.
       "Under such a circumstance, refining margins are under pressure. Given both external and internal factors, we decided to change direction," Mr Atikom said.
       IRPC's new business strategy aims to transform its operation into the topquartile integrated petrochemical complex in Asia by 2014.
       The strategy involves improving production capacity, adding value, reducing cost, maximising asset value and investing in high-margin products.
       More investment is planned for the petrochemical unit to increase efficiency and expand the capacities of highmargin and high-growth products such as acrylonitrile-butadiene-styrene (ABS)and polypropylene.
       It also plans to commercialise its ports and tank facilities through possible joint-venture investments.
       Its 11,000 rai of unutilised land mainly in Rayong, Songkhla and Chiang Mai provinces, would be developed as industrial land serving local industries and some of the plots may also be sold.
       "To implement these plans, a $1.2-billion investment is planned over the next five years from our own generated cash flow. More loans will be sought if this is not enough as our lever-age is relatively low. Our debt-to-equity ratio is only 0.3 times," Mr Atikom said.
       Dr Pailin said the undeveloped assets had been a drag on the company's performance. He hopes the new business strategy will improve the company's return on invested capital (ROIC)to three times the current level in the next five years.
       "Our ROIC is currently at 8-9%. Compared to our peers, we have the capacity and potential to improve. So the target is to achieve a 23% return by 2014. This goal is possible when our initiatives are accomplished," he said.
       The executive expects crude prices,at $72 a barrel in Dubai, to stay at this level until the end of the year although short-term fluctuations cannot be ruled out.
       Crude prices at these levels will continue to suppress refining margins but the petrochemical industry is benefiting from improving demand in China, a trend also likely to continue until yearend.
       In any case, he expects an improvement in performance in the third quarter and further gains in the last quarter if petrochemical product prices continued to improve.
       IRPC shares closed yesterday on the SET at 3.44 baht, unchanged, in trade worth 102.6 million baht.

GOLD TRADERS WARN OF VOLATILITY IN WEEKS AHEAD

2009-08-24T21:05:00.000-07:00

       The next few weeks will be a crucial period for gold prices, and slight volatility is expected to indicate whether bullion prices will rise to US$1,000 (Bt34,100) or fall to $880 an ounce this year.
       Gold traders have warned of volatility from the derivatives market rather than physical gold trading. Oil prices and the US dollar are still affecting gold prices more than real gold consumption is, but it is uncertain whether oil prices will continue to increase, because movements to date are believed to have been forced by hedging.
       Gold Traders Association deputy secretary-general Kritcharat Hirunyasiri said that over the past month, there had been no clear signs of whether gold prices would rise or fall. Prices had moved in a range of $935 to $965 an ounce, but the range was narrowing, and it was expected that a clear direction would become obvious within the next two weeks.
       Kritcharat said if the gold price broke through the $963-an-ounce level, it could rise to $980 and then $1,000 by year-end. However, if it failed to break $930 an ounce, the price could fall to $900.
       "The dollar has more of an effect on gold prices," Kritcharat said. "For example, last Friday night the gold price increased $15 per ounce after the dollar depreciated from 1.422 to the euro 1.435, while oil prices made a smaller impact."
       Although the golbal economy has begun to recover from the economic crisis, the US Federal Reserve is unlikely to adjust its interest rate in the short term. Inflation remains low and does not affect gold prices much even though inflation and gold prices are correlated, he said.
       President Jitti Tangsithpakdi said it was possible gold would reach $1,000 an ounce this year, because the global economy had still not stabilised. Therefore, people are still investing in gold. As well, there is always high demand for gold at the end of a year.
       However, gold prices will not swing as much as they did last year, because funds are investing in many markets, including equities, oil and gold, he said.
       Secretary-general Pichaya Phisuthikul said that in the middle of the month, the gold price declined, but it increased again in the past week as oil prices rose to $60 to $70 a barrel.
       Gold prices will remain volatile, he said. Normally, gold prices move contrary to the Equity Index, but recently when equities have risen, gold prices have sometimes risen, as well.
       "The present gold price is not related to real consumption at all but rather affected by funds investing in the gold market.
       "The recovery, which has been seen in stock markets like Wall Street, including oil-price increases, is still not certain. I believe the economy, which has been severely damaged, needs more time for recovery. Therefore, the present oil-price and Equity Index rises may be an illusion, because they show an adjustment much better than fundamentals," Pichaya said.
       If oil prices and the Equity Indexes fall again, the gold price will also be affected. In Pichaya's view, gold prices are capable of peaking at $980 an ounce or bottoming at $880.
       Meanwhile, Bloomberg said gold, little changed in London yesterday, might decline as a stronger dollar erodes the metal's appeal as an alternative investment. Palladium rose to its highest price in almost a year.
       The US Dollar Index, a six-currency gauge of the greenback's value, rebounded from a two-week low, gaining as much as 0.4 per cent. Gold, which typically moves inversely to the dollar, added 1.4 per cent last Friday, the most this month.
       "The market is likely to retreat towards $925 to $930 an ounce, provided the dollar rebounds from current lows," said VTB Capital analyst Andrey Kryuchenkov in London.
       Immediate-delivery bullion climbed 45 cents, or 0.1 per cent, to $954.30 an ounce yesterday after advancing 0.6 per cent last week.
       December gold futures rose 90 cents, or 0.1 per cent, to $955.60 an ounce on the New York Mercantile Exchange's Comex division.

Oil prices climb above $74 on recovery hopes

2009-08-24T21:03:00.000-07:00

       Oil prices climbed above $74 a barrel yesterday in Asia amid spreading optimism about a global economic recovery.
       Expectations that demand for energy will grow were spurred by Federal Reserve Chairman Ben Bernanke who said Friday that the US economy is reviving.
       Benchmark crude for October delivery rose 22 cents to $74.11 a barrel by mid-afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it jumped 98 cents to settle at $73.89.
       In more good news for the US eco-nomy, the National Association of Realtors said Friday that home resales posted the largest monthly increase in at least 10 years.
       Asian stock markets rallied on recovery hopes, with Japan's Nikkei 225 index jumping 3.4%.
       In other Nymex trading, gasoline for September delivery added 2.43 cents to $2.0199 a gallon and heating oil for September delivery added 1.28 cents to $1.9177 a gallon. Natural gas for September deliver y fell 2.9 cents to $2.775 per 1,000 cubic feat after tumbling another 14.1 Friday.
       In London, Brent prices rose 29 cents to $74.50 a barrel on the ICE Futures exchange.
       Sentiment remains broadly supportive of commodities including oil in anticipation of an economic recovery,"said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.
       New York cr ude prices scaled new 2009 highs last week, rising above $74 Friday on a weak greenback, an improved US macro-economic outlook and positive eurozone data.
       The New York contract soared to $74.72 during US trading Friday, a level last seen on October 20, 2008, before easing to close at $73.89.
       A slew of economic data released last week suggested the US economy and euro-zone economies were likely recovering, boosting hopes that energy demand in tur n would see an uptick,analysts said.
       "Data is sparse this week but should all support the view that recession is over,"analysts from Singapore's DBS Bank said in a report in its view on the US economy.
       Last week, the National Association of Realtors reported that US existinghome sales surged 7.2% in July to a seasonally adjusted annual rate of 5.24 million units, lifting hopes the world's biggest economy was heading for a recovery.
       The slumping US dollar against the euro also fuelled support for crude oil,analysts said.
       A w eaker dollar tends to stimulate demand for dollar-priced crude oil,which becomes cheaper for buyers using stronger currencies. In turn, that pushes prices higher.

PTTEP MAY NEED 50 DAYS TO PLUG TIMOR SEA RIG

2009-08-24T21:02:00.000-07:00

       PTT Exploration and Production said it might take 50 days to stop an oil and gas leak off northwest Australia as marine authorities fight to prevent the slick harming migratory whales and breeding turtles.
       PTT may move a rig from Singapore to plug a well leaking 3,500 metres beneath the seabed, said Jose Martins, a director of the Thai company's Australian unit.
       Oil, gas and condensate started seeping into the Timor Sea last Friday from the West Atlas drilling rig.
       Australia's decision this week on whether to approve Chevron Corp's A$50 billion (Bt1.4 trillion) Gorgon liquefied natural gas project to the south won't be influenced by the spill, environment minister Peter Garrett said yesterday.
       The leak has caused a 30-kilometre light-oil slick off the Kimberley, a region Tourism Australia describes as "one of the world's last true wilderness areas."
       The incident is "potentially going to bring a bit of attention on itself and on the industry," said Peter Arden, a Melbourne-based mining analyst at Ord Minnett, an affiliate of JPMorgan Chase. "Most of the big guys do their work very carefully because they just can't afford a headline like this."
       PTT, Thailand's only publicly traded exploration company, rose Bt7.00 to close at Bt244.00 and its subsidiary PTT Exploration and Production edged up Bt1.00 to Bt142.00 as crude oil traded near a 10-month high.
       The company will pay for the cost of dispersing the slick, PTTEP Australasia's Martins said in Perth on Sunday.
       He declined to comment on the risk of the West Atlas rig catching fire, what caused the leak, how much oil or gas may be flowing out, or the related costs. All 69 crew were evacuated on Friday.
       "MARINE SUPERHIGHWAY"
       The area has been dubbed a "marine superhighway", Australian Greens marine spokeswoman Senator Rachel Siewert said on Sunday. "There are populations of baby turtles this time of year, and the area also serves as a migrator route for whales and other marine life."
       The slick is drifting away from the mainland in a northwesterly direction and unlikely to reach the coastline, Western Australia Premier Colin Barnett said yesterday.
       It may still affect the Ashmore Reef, about 840 kilometres west of Darwin and 610 kilometres north of Broome, he said.
       The reef is regarded by the government as a "biodiversity hotspot" because it intersects the bio-geogrphical regions of Australia and Southeast Asia.