Thai Oil Public Company Limited Presentation to Investors PTT - - PowerPoint PPT Presentation
Thai Oil Public Company Limited Presentation to Investors PTT Corporate Day arranged by Deutsche Bank 23-24 January 2006 Disclaimer: The information contained in this presentation is intended solely for your personal reference only.
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CONFIDENTIAL – NOT FOR DISTRIBUTION, NOT AN OFFER OF SECURITIES
Disclaimer:
The information contained in this presentation is intended solely for your personal reference only. Please do not circulate this material. If you are not an intended recipient, you must not read, disclose, copy, retain, distribute or take any action in reliance upon it.
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9% 55%
Thaioil Power Thaioil Power (TP) (TP)
3-on-1 Combined cycle Electricity 118 MW Steam 168 T/hr
Independent Independent Power (Thailand) Power (Thailand) (IPT) (IPT)
PTT 20% Thaioil 24%
2-on-1 Gas-fired, Combined cycle Electricity 700 MW
Related Business & Income Stability Thai Paraxylene Thai Paraxylene (TPX) (TPX) Thai Lube Base Thai Lube Base (TLB) (TLB)
Capacity: Current:348 Kt/y (PX) Mid 07: 853 Kt/y total 408 Kt/y (PX) 160 Kt/y (Bz) 136 Kt/y (To) 149 Kt/y (MX)
Value Enhancement
Capacity: Lube Base oil: 270 Kt/y
Thaioil Marine Thaioil Marine (TM) (TM)
A fleet of 5 oil & petrochemical vessels with int’l classifications Total capacity: approx 30,000 DWT
Thappline Thappline
Multi-product Pipeline Capacity: 26,000 mn Litres/Y.
Product Marketing Support
100% 56% 100% 100%
Capacity: Current: 220 Kbd Mid 07: 270 Kbd
Utility Supply to Group
Thaioil Thaioil (TOP) (TOP) Refinery Refinery Petrochem Petrochem/ / Lube Base Lube Base OIl OIl Power Power Transportation Transportation
TOP Info: # of shares: 2,040 mn Mkt Cap: ~US$ 3.4bn Mkt Cap Ranking: 7 Shareholder structure PTT 49.54% Free float 43.28% Others 7.18%
PTT 26% JPOWER 19%
Core Refining Operations
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Remark: % is based on total amount Before deducting inter-company transaction.
* acquired 100% in Oct’04
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CDU-1 CDU-2 CDU-3 TCU 19,300 HCU-1 FCCU 10,300 CCR-1 HDT-1 KMT 2,400 HDS-1 LPG ULG 95 JET KEROSENE GAS OIL ULG 91 HCU-2 47,600 CCR-2 50,000 HVU-1 HVU-2 HVU-3 95,000 HDT-2 HDT-3 74,900 205,000 FUEL OIL HDS-2 HDS-3 74,000 MX MX* 34,300
Crude
Distillation/Separation Conversion/Upgrading Treating
Long Residue LVGO Gas Oil Kerosene CDU Overhead Short Residue TC Residue TC Waxy Heavy Cycle Oil HC Gas Oil Heavy Naphtha Platformate LPG Light Plat Light Cycle Oil H C K e r
CC Gasoline ADIP Isomerate NGL 72 RON Mixed Xylene 50 RON 70 RON ISOM 21,500 Waxy IN-LINE BLEND BATCH BLEND Light Naphtha Imported LR TC Kero/GO 95 RON 103 RON 89 RON 91 RON
* Sold to TPX in Apr’05 9
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70% 67% 40% 39% 39% 38% 31% 24% 24% 18% 18% Thaioil Caltex Australia Singapore Petroleum Reliance BPCL S-Oil Indian Oil SK Corp ESSO Malaysia Petron Zhenhai Refining
(%)
Thaioil can meet new environment specifications at lower cost Thaioil can meet new environment specifications at lower cost
(1)
Source: 2004 Oil and Gas Journal, The Company (1) Hydrocracking, catalytic cracking, thermal cracking, catalytic reforming and isomerization capacities divided by total crude distillation capacity (2) Hydrocracking, hydrotreating and hydrodesulfurization capacities divided by total crude distillation capacity
(2)
(%)
Higher conversion ratios yield higher refining margins Higher conversion ratios yield higher refining margins
(%)
92% 65% 43% 43% 42% 41% 29% 27% 22% 18% 9%
Thaioil S-Oil Singapore Petroleum BCP SK Corp ESSO Malaysia Petron BPCL Caltex Australia Zhenhai Refining Indian Oil
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Operating Cost Index Annualized Maintenance Costs Maintenance Effort (Based on Headcounts)
Shell Personnel Index (Based on Headcounts) CEL Corrected Energy Loss Utilization Operational Availability
2003 2004
High maintenance effort and Personnel Index is offset by low labor costs.
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12 913 230* 153 139 139 178 62 12 Intake (Kbd) 86% 105% 90% 92% 92% 83% 52% 58% Utilization
9 50 101 121 121 144 217
KBD
Oil Production by Refinery1)
Local refineries run at 90% in Q3/05. However, operating rate reduced to 86% for 11M/05, reflecting shutdown
Oil demand for 11M/05 is appx. 745 kbd, 2% rose from 2004. Drop in local demand was seen in Q3/05 as a result of rainy season, flooding and high oil price after the oil subsidy removal in Jun.
Note 1) Exclude feedstock for petrochemical plant
Domestic Oil Demand / Refinery Intake
Thaioil Esso RRC SPRC TPI BCP RPC
Source: Company
764 765 712 745 731 67 70 92 141 85 88 32 126 66 34
86% 90% 84% 88% 90%
200 400 600 800 1000 1200 50% 55% 60% 65% 70% 75% 80% 85% 90% Oil Demand Feed for Petrochem Net Export % Utilization rate (rhs)
KBD
Q1/05 Q2/05 Q3/05 2004 11M/05
862 900 925 920 (Intake) 911
11-Month 2005 11-Month 2005 Total Country
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30 40 50 60
J 2 4 M M J S N J ' 5 M M J S N
With multiple cracking and treating facilities, Thaioil has flexibility to select most economical crude capitalizing on the favorable sweet and sour differential to optimize refinery operation. 2005 Average Oil Prices Upto 80% of crude from Middle East (whose prices are more attractive than Far East sweet grade) are normally processed. LR purchased from BCP during the first 9 months was about 9 kbd on average. Thaioil could process higher Far East and local crude due to better quality when price differential between M/E-F/E became narrow (i.e. in Q3/05). Middle distillate was produced to meet local demand (represents about 50% of Country's demand).
Thaioil Thaioil’ ’s s Crude Mix and Product Yield Crude Mix and Product Yield
US$/bbl
Tapis Dubai
8.58 8.58 TP TP-
DB 40.31 40.31 64.03 64.03 62.10 62.10 57.90 57.90 49.32 49.32 Fuel Oil Fuel Oil Diesel Diesel ULG 95 ULG 95 Tapis Tapis Dubai Dubai
80% 75% 6% 6% 14% 19% 16% 53% 56% 56% 38% 28% 9% 11% 33%
Thaioil Thaioil’ ’s s Crude Mix and Product Yield Crude Mix and Product Yield
Middle East Far East Heavy Light Distillate Middle
2005
Others
2004
Crude Mix Product Yield Domestic Demand
11M05
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BCP 4% TPX 11% Shell/Caltex, 14% PTT, 49% Export, 14% Other Independent domestic, 15%
39 49 59 69 79
J u l ' 4 A S O N D J ' 5 F M A M J J A S
FY 05
Including 7% export of PTT
Appx 49% of products was sold to PTT at the market prices. (Domestic 42% and Export 7%). About 14% of products was sold to Shell and Caltex (Marketing). While Sales to other customers was 15%. Although the export in Q3/05 increased due to rainy season and slow domestic demand growth, overall export for 2005 was only 14% (compared with country export of 17%). When export, Thaioil switched to produce more Jet fuel at the expense of diesel due to its more favorable price.
Jet Diesel
US$/bbl
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20 30 40 50 60 70 80
J a n ' 4 M M J S N J a n ' 5 M M J S N
Oil Prices Movement
Strong demand and tight supply supported high oil prices during the first 9M. Hurricanes in US and slow recoveries of US refineries fueled gasoline, diesel and other oil prices in Q3. Delayed and warmer winter in The States, coupled with high stock pile post Katrina weakened prices in Q4/05. Dipped in Thaioil’s GRM in Q2/05 was due to softening product price in May (high US inventory). GRM in Q3/05 rebounded as a result of Katrina. Regional GRM was pressured In Q4/04, due to warmer weather, stock up in US, prompt high VLCC freight as well as lackluster demand from high oil price (after subsidy reduction/removal in certain countries).
Thaioil’s GRM (incl. MX)
* Transfer MX to TPX as from April 1 2005 * Transfer MX to TPX as from April 1 2005
US$/bbl
Diesel Gasoline Tapis Oman Fuel Oil
US$/bbl 2 4 6 8 10
Q1/05 Q2/05 Q3/05 FY/04 9M05
8.75 6.55+1 8.52+1 7.50 7.9+0.7
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(in kbd) 2005 2006 2007 2008-10 China 60 466 640 880 India 208 115* 280 620 Indonesia – 100 – 150 Thailand1) – – 50 – Taiwan 42 – 42 – Pakistan – – – 150 Vietnam – – – 121 Total addition 310 681 1,012 1,921 (in kbd) 2004P 2005F % Growth 2010 % Annual Growth (2005-10) China 6,105 6,470 +6.0% 8,494 +5.6% India 2,318 2,412 +4.1% 2,906 +3.8% South Korea 2,218 2,253 +1.6% 2,441 +1.6% Thailand (1) 731 768 +5.0% 930 +4.1% Total Demand 22,583 23,311 +3.2% 27,433 +3.3% Total Supply 22,786 23,096 +1.4% 26,710 +3.0%
Note: excluding Middle East demand & refining capacity additions * exclude 220 kbd expected to come on stream in end Q4/06 Source: FACTS, Fall 2005 and (1) The Company
Asia Pacific Refinery Capacity Additions Regional Oil Demand Asia-Pacific Demand/Supply Additions
728 1,536 2,369 310 991 2,003
2005 2006 2007
kbd
Accum Demand Additions Accum Supply Additions 4,840 3,924 2008 - 2010
might not have taken into account the weaker-than-expected demand in Q4/05 partly as a result of oil subsidies in many countries.
3.5%)., while its GDP grew by 9%
Other regional countries) could not sustain.
to be tight.
more stringent product specx, which fuels shortage of supply situation.
kbd
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1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Current CDU Capacity Additions in 2005 Additions through 2006-10
China Japan S Korea India Singapore Taiwan Indonesia Thailand Australia Malaysia Pakistan Phillipines Vietnam
(in kbd)
Source: FACTS, Fall 2005 17
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Jan04 M M J S N Jan'05 M M J S N
Plat
PX, MX and Platformate Spot Prices
PX MX
US$/Ton
* Transfer MX to TPX as from April 1 2005
PX-Plat PX-MX
Background
After years of liquidity and profitability problems, TOP acquired 100% shares in Oct’04. In Jan’05, TPX invested US$ 5 M. to change catalyst and effectively increase PX output to 348 KTA (a 21% increase). In Apr’05, transfer MX unit was transfer to TPX.
2004 9M05 Gross Margin (US$ M.) 20 80 (Equivalent to $/bbl) 0.25 1.00 Net Profit (Baht M.) 115 2,371
PX Market
Other S.E.Asia N.E.Asia Europe North America Utilization (rhs) Capacity (rhs) South America
Source Company
World Production by Region
1,000 800 600 400 200
A utilization rate of more than 80% would trigger investment in new capacity. Regional PX demand grows at 6%, outpacing the supply growth of 2%, mainly driven by China. Thailand PX market 2005 2006
Demand
295 362
714 965
429 Supply
495 455
445 485
340 340 Surplus / (Deficit)
1,009 1,280 1,756 1,387 271 (476)
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Background
demand, tight supply (after closures of plants in Asia) and strong diesel price.
2004 and 380 US$/ton in 2005.
production unit). Net profit has gone up by 186%, as compared to 2004, to 1,352 Baht M.
problems as a result of Baht devaluation and depressed lube base oil market.
integrated it with the refinery.
identified 15 synergy projects with the refinery.
Higher MPU’s Utilization / Profitability Lube Base Market
J a n / 4 M M J S N J a n ' 5 M M J S N
US$/Ton
HSFO 500SN
20 370 331 1,4351,352
83% 70% 60%
500 1000 1500 2000
2003 2004 9M05
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
EBITDA Net Profit % MPU Utilization (Lube Production Unit) Baht M.
Lube Base - HSFO
800 600 400 200
% Utilization
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Plant Availability Improved Financial Performance IPP Industry Background
Unocal.
build the power plant to EGAT as the first ranked bid proposal among 32 bidders.
GTs which were later replaced with Siemens GTs in 2003 and 2005, respectively, at Siemens and Insurance expenses.
MW as from Jun’05.
variable cost to EGAT. IPP will get availability payment (AP) which covers fixed cost, debt service and return.
Therefore EGAT plan to announce new round IPP in end 2006 / H107.
(Baht M.) 9M/05 9M/04 +/(-)
1,099 577 522
613 (200) 813
(444) (269) (175)
169 (469) 638
77% 70% 78% 57% 48% 41%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2000 2001 2002 2003 2004 2005
700 MW from Jun’05
* In year 2001, IPT report net profit of 813 Baht M.
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EBITDA
TOP 74% TLB 6% TPX 13% IPT&TP 7%
EBITDA
TOP 69% TLB 10% TPX 17% IPT&TP 4%
Net Profit
TM 1% TOP 93% IPT&TP 7% TOP 102% IPT&TP -1% TM -1%
mn. .
mn. .
mn. .
mn. .
9M/2005 9M/2004 9M/2005 9M/2004
to:
utilization rates
Jan’ 05
(TPX/TLB) from 7% to 26%.
lower than 20% during 2006-10:
Corporate BOI Tax Loss Income Tax Holiday Carry Forward TOP 25%
TPX
until 2009
TLB 30%
TP
until 2006
until 2008
+34%
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2,486
2,957
Dec ’02 Dec ’04 Current Assets Fixed Assets Other Liabilities Total Equities
US$ mn
2,816
Sep ’05
2,462
Dec ’03 Long-term Debts
1,564 1,279 982
874
Note: Convert by 41 Baht/US$
Since 2002,
up ~Bt 20 bn (+20%)
down ~Bt 28 bn (-44%)
up ~Bt 26 bn (+70%)
3.0 4.8 11.2 15.0 6.5 2.2 1.4 0.7 0.6 3.5 1.3 1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2002 2003 2004 2005 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0
ICR LT Debt/Equity Debt/EBITDA
Interest Coverage LT Debt / Equity Net Debt/EBITDA
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yield or 13.09% annualized).
10-Year Bullet Bond
US$ 350 M. @ coupon 5.1%. (Moody’s Baa1 / S&P’s BBB)
5-Year revolving US$
Loan: US$ 200 M.
6-Year syndicated
linked revenue.
corporate tax)
TOP 72% ($629M) TLB & TM 0% IPT 18% ($156M) TP 3% ($27M) TPX 7% ($62M)
112 324 377 59 100 200 300 400 1 Yr 2-4 Yr 5-7 Yr 8-10 Yr
US$ M.
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US$ Mn 2005 F 2006 F 2007 F Total In 2005-07 CDU-3 Debottlenecking1) 54 110 54 218 Mercury Removal Units 6 2 8 SBM Expansion 20 75 55 150 Power Projects2) 11 21 11 43 Maintenance Projects 15 15 15 45 TPX (Expansion) 10 50 55 115 TLB (Synergy Project) 5 5 10 Thaioil Marine 6 6 12 Total 127 284 190 601
US$ Mn
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US$ Mn Total In 2005-07 CDU-3 Debottlenecking 218 Mercury Removal Units 8 SBM Expansion 150 Power Projects 43 Maintenance Projects 45 TPX (Expansion) 115 TLB (Synergy Projects) 10 Thaioil Marine 12 Total 601
Size: 50 kbd (additional 23%) EPC: ABB PMC: Foster Wheeler Investment Cost: US$ 4,000 /bbl Expected C.O.D : Mid 2007 IRR: ~ 20% based on 4.5 US$/bbl GRM Size: 52”diameter * 14.5 km long pipeline EPC: SAIPEM PMC: Bechtel Expected C.O.D : Mid 2007 Benefit: Freight saving Size: 500,000 T/Yr (additional) Cost: US$ 115 M. est. Expected C.O.D : Mid 2007 Benefit: Margin base on aromatics (BTX) over ULG95 and able to supply oil product For example, TLB/TOP Hot Oil Exchange Cost: US$ 3 mn Benefit: Enhance CDU-1 feed by 5 kbd Expected C.O.D : Mid 2006
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0.5 1 1.5 2 2.5 3 3.5 2011 2012 2013 2014 2015
'000 MW
trimmed demand from high oil prices in 2005 and Tsunami effect which force the government to adjust the demand projection and structure of fuel sources.
an additional 2x700MW power plants:
facilities for back up
Thailand Electricity Power Generating Capacity (Thailand Power Development Plan 2004, EGAT Plc.)
Source: EGAT Plc., August 2004 and EGAT Plc.’s Prospectus
New Power Capacity Allocation Between EGAT Plc. & Private EGAT Plc. Private
5 10 15 20 25 30 35 40 45 50 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ‘000 MW 50 100 150 200 250 MWh EGAT Plc. Private EGCO+RATCH Import New Private Supply
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Remain primarily a Remain primarily a “ “pure play pure play” ” refiner refiner Increase Increase participation in participation in power generation power generation Expand refining Expand refining capacity to capture capacity to capture future domestic growth future domestic growth Integrate and expand Integrate and expand petrochemical petrochemical business business Continue to enhance Continue to enhance refining margins and refining margins and rationalize costs rationalize costs
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and modern refinery in the region;
industries - inability of supply to keep up with continuously growing demand;
entry due to investment cost, limited new supplied, prospect demand and captive market.
from subsidiaries, as a result of business restructuring & synergy within the group;
completion of the refinancing exercise;
enhances investment returns & ensures growth;
and modern refinery in the region;
industries - inability of supply to keep up with continuously growing demand;
entry due to investment cost, limited new supplied, prospect demand and captive market.
from subsidiaries, as a result of business restructuring & synergy within the group;
completion of the refinancing exercise;
enhances investment returns & ensures growth;
2004
Best Equity Deal, Best IPO, Best Privatization and Best Thailand
Deal for the Year 2004
Best Deal of the Year for IPO in Thailand in 2004 Thai Capital Market Deal in 2004 Asia’s Best Equity Deal in 2004 Best IPO Deals in 2004 Best Newly Listed Company
2005 Best Newly Listed Company in Asia Most Improved Companies in Asia
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Taken 9 September 2004
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The site is in the Eastern region, 124 km from
Has 2 mooring facilities for crude receiving and product
Close to market by connecting to multi-product pipeline Has space available for future expansion
Source: Ministry of Energy 2003
9% 10% 59%
11% 11%
SARABURI LUMLUKKA DONMUANG SUVARNABHUMI Esso
GULF OF THAILAND
Shell (RRC) Caltex (SPRC) MAP TA PHUT SRIRACHA
Ø24”, 134 km Ø18”, 38 km Ø10”, 29 km Ø18”, 92 km
Main Line Expansion Pipeline SBM Facility
Domestic demand distribution THAIOIL
Bangchak TPI
SBM
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Refinery Size & Complexity Refinery Size & Complexity
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16% 14% 19% 19% 34% 56% 57% 41% 47% 47% 47% 28% 45% 34% 34% 18% 11% 10% 75% 14% 33%
Thai Demand Thaioil Esso RRC SPRC TPI Bangchak
2004 Thai Refinery Product Mix vs. 2004 Thai Refinery Product Mix vs. Thailand Demand Thailand Demand
Source: PTIT Focus Special Annual Issue 2004 (1) Light distillates includes propylene, LPG, ULG, gasohol, isomerate, reformate, naphtha, solvent, and mixed-xylenes (2) Middle distillates includes kerosene, jet fuel and diesel (3) Heavy distillates includes fuel oil, bitumen (4) Middle distillates Includes petrochemical products (44%)and solvent (5) Include Long Residue supplied to Thaioil
Middle(2) Heavy(3) Light(1)
(4) (5)
Light Middle Heavy Total
Industry
7% 6% 62% 13%
Transport
68% 72% 23% 67%
Electricity
0% 0% 14% 2%
Other
25% 22% 1% 18% 100% 100% 100% 100%
Source: Ministry of Energy
Domestic Use of oil products Domestic Use of oil products
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220 KBD
700 MW
348 Kt/y
270 Kt/y
Alternative Sources Alternative Sources Long Residue 850,000 T/yr By-products
118 MW
28 mmcfd
120 mmcfd Reformate 1.5 mn T/yr By-Products Domestic 90% Export 10% Domestic 70% Export 30% Lube Base Oil 41 MW 50 MW 84 T/hr 10 MW 40 T/hr 11.5 MW 42 T/hr Domestic 50% Export 50% 700 MW Finished Products PX
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Rationales Ethanol Project Background
and use Ethanol as high octane component instead for environmental concern/import reduction/agricultural support.
as only 3 licensees (from 24 licensees) is currently in operation for 300,000 L/Day.
Tapioca chips more than 3 mn Tons/Yr (1 mn L/Day of Ethanol requires about 0.9 mn Ton/Yr
1 – 2 Mn L/Day
1 – 2 Mn T/Yr
150 – 250 Mn USD
under consideration Economy of Scale