UPDATE 2 – Thailand’s PTT to expand retail sector to counter impact of slowing global growth

* Seeks approval for initial public offering of retail unit

* Subsidiaries need to integrate upstream and power acquisition

* Invest in Myanmar oil and liquefied petroleum gas receiving stations (new upstream investment)

KUALA LUMPUR, June 24 (Reuters) – Thailand’s largest energy company PTT Pcl has stepped up investments in the retail and industrial power sectors to cushion its refining and chemicals businesses from a global economic slowdown, the chief executive of PTT Pcl said on Monday. .

“We face a global challenge, which is the (U.S.-China) trade war. That’s one of the challenges we face — how can we survive in the short term?” PTT President and CEO Chansin Treenuchagron told Reuters.

Asian oil and petrochemical producers face tight margins as fuel and chemicals supplies exceed demand as new production plants start up, while global demand growth is hampered by the trade war between the world’s two largest oil consumers, the United States and China. slow down.

The International Energy Agency has cut its 2019 oil demand growth forecast by 100,000 bpd to 1.2 million bpd as the outlook for world trade deteriorates, although stimulus and developing countries should boost growth in 2020.

“We look at continuous improvement in the short term. How can we sell at a lower cost? How can we find another income that is not dependent on oil and petrochemicals?” Qian Xin said.

One way to generate more revenue is to expand its retail presence, including expanding the Amazon coffee shop brand across Asia, he added.

PTT is planning an initial public offering (IPO) of PTT Oil & Retail Co (PTTOR), the sixth listed company under the PTT group, on the Stock Exchange of Thailand.

PTTOR, which includes gas stations, Amazon cafes and convenience stores, is expected to start the IPO process later this year and raise about $2 billion.

PTT is seeking approval from shareholders, the board and local securities regulators for the IPO, Chansin said, but declined to say how much the company plans to raise.

The retail sector’s “market is no longer just in Thailand, we want to expand in Indochina and other Asian countries,” he said on the sidelines of the Asia Oil and Gas Conference.

PTTOR also plans to build an oil and liquefied petroleum gas (LPG) import terminal near Thilawa, Myanmar, with the Kanbawza Group, Chansin said.

Additionally, Chansin said PTT is scaling up its utility subsidiary, Global Power Synergy (GPSC), which is focused on providing power to industry.

GPSC is also working on natural gas power generation projects in Myanmar, he said. The company has added to its power generation assets through the acquisition of power projects of PTT subsidiary Thai Oil Pcl and the acquisition of France’s Engie SA’s Glow Energy Pcl, more than doubling GPSC’s generation capacity.

Last week, PTT also increased its 2019 investment spending plan by 47 percent to 103.7 billion baht to support its subsidiary’s expansion into power and renewable energy.

upstream

Another unit – PTT Exploration and Production Pcl – has been on an acquisition spree, securing concessions in the Erawan and Bongkot gas fields in the Gulf of Thailand, buying Murphy Oil Corp’s Malaysian oil and gas assets and Partex Holding BV.

“We’ve had three big M&A projects,” Qianxin said.

“When you eat too much, too fast, you can’t digest … we need to cultivate something first, not to eat too fast,” he added.

The recently acquired Partex produces 16,000 barrels of oil equivalent (boed) per day from fields in Oman, the United Arab Emirates and Kazakhstan.

Chansin said that PTT’s focus is mainly on gas and it wants to focus on the Middle East, so non-Middle Eastern assets may be sold after the Partex acquisition.