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Centara Grand at Central Plaza Ladprao
23 Feb 2015
Analyst Meeting FY 2014
1
Safety and Sustainability: PTT implements several safety programs that really improve the safety performance
Aspiration = Zero Accident
0
1
2
3
4
2009 2010 2011 2012 2013 2014
Injury Rate (Injuries/Million hrs)
TRIR-employee TRIR-contractor
Benchmark- Employee Benchmark- Contractor
1/
1/ Total Recordable Injury Rate
Benchmark : 2013 SAM Robeco Sustainability Members Oil & Gas Industry
Contractor 76% 59%
Employee
Percent better than peer Percent better than peer
1
v
PTT Sustainability Highlight
Campaign “1 ลา้นกลา้ถวายพอ่” incorporated digital
media and online community to help promote forestation
Establishing
Vidyasirimedhi & Kamnoetwit Science Institute
”ป่ากลางกรงุ”
Social & Education
Environment
Dow Jones Sustainability Indices : PTT maintain in DJSI World and DJSI Emerging markets list for 3 consecutive year and PTT Group (PTTEP, IRPC) first time listed in 2014
Sustainability
วพน. วพม.
2
2
2014 Year in Review Performance 2015 Outlook
Contents
2014 Year in Review
Performance
2015 Outlook
3
Civil war in Ukraine
US Economy Recovery
50
60
70
80
90
100
110
120
130
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$ / BBL
Q1 Q2
Iraqi government seized control from strategic town of Jurf al-Sakhar
Libya resume oil exports terminal
Dubai Price 2014 VS 2013
2014 Year in Review: Global and Energy sector
Politics
Economics
Iraq civil war as ISIL taking control of big cities
ECB introduced negative deposit rate
Market expect stimulus program from ECB
Q3
End of QE3 in Oct’14 27 Nov. 14, OPEC
maintained crude oil production
Q4
• Year of global geopolitical turmoil
• Oil Supply Surplus 1.4 MBD esp. from US Shale oil
• Disappointing Oil Demand in Y2014 increase(YoY) only 0.6 MBD
• Oil price ended sharply lower (50% from beginning of Y2014)
• Developing and emerging countries’ economy slowdown except the US economy.
2013
2014
4
Dubai 31 Dec’14 = 52.9 usd/bbl
Dubai 2 Jan’14 = 107.8 usd/bbl
2014 Year in Review Performance 2015 Outlook
4
Jan-14 Apr-14 Jul-14 Oct-14
Bangkok Shutdown
(13 Jan – 2 Mar)
Invalid General Elections
(2 Feb)
2014 Year in Review: Thailand
SET Index 2 Jan 1,230.77
SET Index
30 Dec 1,497.67
Martial law imposition
(20 May)
Coup d'état and NCPO establishment (22 May)
Thailand set 2.575 trillion baht budget for 2015
NCPO maintained 7% VAT for one year
NEPC passed resolution for PTT to separate pipeline (15 Aug)
General Prayuth to be prime minister (24 Aug)
Politics
Economics
NCPO approves 3 trillion baht infrastructure projects
(for 2015-2022)
LPG retail price hike : 4 times from 21.38 THB/kg to 24.16 THB/kg
(Total 2.78 THB/kg)
NGV price increase : 2 times from 10.50 THB/kg to 12.50 THB/kg
(Total 2.00 THB/kg)
• Bangkok
Shutdown
• The 13th Coup d’etat on 22 May’14,
• Energy Reform
for petroleum prices including NGV, LPG
• SET outperform all major stock markets (SET 22 %
Hang Seng 1 % Nikkei 7 % )
SET Index 2014
5
BOT cut interest rate by 0.25% to 2%
2014 Year in Review Performance 2015 Outlook
5
• Successfully commenced gas production from Zawtika
• Ramp-up production from Montara
• Additional exploration discovery in Mozambique Area 1
• Strengthen domestic base through Hess Thailand acquisition
• Restructured Oil Sands business through KKD Asset swap
• Disputes settlement with ex-owner by the discretion of court
• Filing with SET and SEC
6
• Successful COD of key margin improvement products i.e. HVU-2 revamp, CDU-3 Preheat Train
• Successful COD of BV Project Butadiene
2014 Year in Review: 2014 Highlights
• BCM during BKK/PTT shutdown (period) – no business interruption & account closing on time
• GSP#5 resumed its full operation after tie-in permanent WHRU
• NGV/LPG Price lifting
• Group Funding : 3,796 MMUSD (PTT: 302 MMUSD, Affiliates: 3,494 MMUSD)
• Stress testing
• PTT Regional Treasury Center (PTT RTC) in full operation
2014 Year in Review Performance 2015 Outlook
6
0
5
10
15
20
25
Jan-13 Jul-13 Jan-14 Jul-14
50
70
90
110
130
Jan-13 Jul-13 Jan-14 Jul-14
25
30
35
Jan-13 Jul-13 Jan-14 Jul-14
100
300
500
700
900
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14
Avg. 16.5
NG Prices ($/MMBTU)
* JLC = Japan LNG Cocktail : Landed LNG price in Japan
Key Business Drivers: Oil price plunged from Non-OPEC supply while OPEC maintained its level
7 Note: Figures are monthly average
Avg. 98.3
Avg. 104.5
Avg. 538
Avg. 30.0
Dubai vs FO ($/BBL)
HDPE and PX spreads($/Ton) FX (THB/USD)
Dubai
FO
HDPE
Avg. 599
PX Avg. 32.7
Avg. 105.3
Avg. 97.9
Avg. 607
Avg. 302
Avg. 16.6 JLC*
LNG มีบทบาทส าคัญในการดึงราคา pool
Avg. 106.6
Avg. 15.7
Avg. 98.1
Avg. 31.7 Avg. 574
Avg. 505
Avg. NG
Avg. 8.8 Avg. 8.9 Avg. 9.0
Avg. 87.9
Avg. 82.8
Avg. 750
Avg. 385
Avg. 32.5
Avg. 16.0
Avg. 8.5
2014 Year in Review Performance 2015 Outlook
7
Avg. 16.3
Avg. 17.5 Spot LNG Avg. 16.8
Avg. 12.5
6,937 17,796
11,366
4,996
25,311
23,414
29,666
2,364 1,178
28,454
39,347
37,139 11,450
17,009
9,567
8,125
-5,747
2013 2014
PTTEP
PTT
Others
Refinery
Petrochem
93,091
44%
69%
38% 50% 171%
2014 Performance: PTT Group: Non recurring & stock loss pressured performance
8
MMTHB
*including petroleum exploration expenses and royalties
Oil Margin and Vol increased 3%
Performance decreased mainly from higher stock losses Trading Vol. decreased 2%
Margin increased 32% from condensate business
Lower performance of other affiliates
mainly from PTTGE’s asset impairment
Margin
FX gain
OPEX*
Share of income
Interest expense &
income taxes
Other Income
40%
55,795
Non-recurring
items
Avg. A/C GIM decreased 59% Aggregate intake decreased 7%
Refinery’s margin decreased 81%
Aromatics: PX spread drop 28%
Olefins spread improved, 20%
Sales vol. increased 10%
Performance decreased mainly from recognition
of impairment loss of assets, higher DD&A and
operating expense
Gas GSP margin increased 38%
GSM margin increased mainly from shortfall agreement
2014 Year in Review Performance 2015 Outlook
Petrochem
PTTEP
Refinery
Others
Contents
9
2014 Year in Review
Performance
2015 Outlook
2014 Year in Review Performance 2015 Outlook
Financial Management
and Key Issue Updated
E&P key accomplishments in 2014
E & P Gas Oil & Trading Refining PetChem Others
10
Production
Operations
10
To be update Maintain domestic production to support energy demand
Successfully commenced gas production from Zawtika
Ramp-up production from Montara to full potential
Strong production base from high-margin assets : 10% Growth
Continued appraisal program in Zawtika, Myanmar M3 and Algeria HBR
Kick-off Myanmar PSC-G & EP-2 exploration program
Additional exploration discovery in Mozambique Area 1
Gaining clarity on resource potential through continued exploration
Strengthen domestic base through Hess Thailand acquisition
Restructured oil sands business through KKD asset swap
Expanding exploration horizon into Brazil high-potential areas
Active portfolio management for short-term and long-term growth Portfolio management
Recorded >4 bn USD operating cash flow from higher sales volume
Strategic funding of 1.6 bn USD to strengthen capital structure
Balance dividend payment and cash flow with 4.50 THB/share dividend
Financially well-positioned against the oil price headwind Financial management
2014 Year in Review Performance 2015 Outlook
477
-739
1,847
677
2013 Q3/14
E&P Performance: Lower net income in 2014 mainly from impairment loss of assets
Product Prices
Net Income (100%)
Sales Volume
Key Highlights
8.13 8.06 7.92* 8.03*
100.19
74.88
100.15 94.91
65.15 56.54
65.58** 63.38**
Q3/14 Q4/14 2013 2014
Liquid ($/BBL)
Gas ($/MMBTU)
Weighted Avg. ($/BOE)
MMUSD
221 239 192 217
104 108
101 105
Q3/14 Q4/14 2013 2014
347
Liquid
Gas
KBOED
325
11
293
25%
* Gas price, if excludes Vietnam 16-1 retroactive sale recording, is 8.07$ for 2014/ 8.01$ for 2013/ 7.98$ for Q4 13
E & P Gas Oil & Trading Refining PetChem Others
** Average selling price, if excludes Vietnam 16-1 retroactive sale recording is 63.59$ for 2014/ 66.09$ for 2013/ 66.46$ for Q4 13
63% YoY
10% YoY
13%
1%
5%
3% 322
7% QoQ
255% QoQ
Q4/14 2014
QoQ
• Sales volume increased from Montara and Zawtika project • Avg. price decreased in line with world oil price. • Net income loss from lower price and recognition of impairment
losses of assets in PTTEP Australasia project and Mariana Oil Sand project
YoY
• Sales vol. increased mainly from full year sale of Montara, higher production of Contract 4 and first gas export from Zawtika.
• Net income decreased mainly from non-recurring items due to impairment of assets, increase in write-off dry hole and DD&A
1%
2014 Year in Review Performance 2015 Outlook
Financial Management
and Key Issue Updated
E&P Priorities in 2015
Adaptive to industry fundamental change
E & P Gas Oil & Trading Refining PetChem Others
12
To be update Short term
Medium term
Long term
Implication Priorities in changing industry environment
Deliver 6% volume growth as planned
Focus on cost optimization and investment prioritization
Leverage strong balance sheet for value-creating growth
opportunity
Take a measured approach on our pre-development assets
e.g. Mariana Oil Sands, Algeria HBR, Cash Maple
Continue to focus on our core basins in the southeast Asia
Reassess long term aspiration
2014 Year in Review Performance 2015 Outlook
Business Segment
Q3/14 Q4/14 QoQ Y2013 Y2014 YoY
15,840 9,680 (39%) 44,836 54,102 21%
• S&M 7,092 3,290 (54%) 18,436 20,456 11%
• TM 6,681 5,874 (12%) 24,984 26,071 4%
• GSP 5,190 3,637 (30%) 13,663 20,030 47%
• NGV (5,082) (4,865) 4% (18,981) (19,962) (5%)
• Others 1,959 1,744 (11%) 6,734 7,507 11%
13
PTT EBITDA Performance:
( Unit:MMTHB)
3,126 (236) >(100%) 13,297 11,578 (13%)
1,010 (331) >(100%) 5,418 5,069 (6%)
*MIS ** Included Gas/Oil/Trading affiliates 13
Gas-EBITDA
Oil-EBITDA
Trading*-EBITDA
2014 Year in Review Performance 2015 Outlook
Total** 19,976 9,113 (54%) 63,551 70,749 11%
Auto 21.38
Cooking 18.13
Industry 30.13
LPG NGV
Public Car 8.50 THB/Kg
Private Car 10.50 THB/Kg
New Gov.
New Gov.
Energy Price Reform: Blessing in Disguise
14
Adjusted 3 times Total change +2.50 for Private Car +1.50 for Public Car
10.00
13 .00
Adjusted 4 times Total change +1.53 for Cooking +2.78 for Auto -5.91 for Industry
Petroleum Products Total change -14.79 for ULG -13.33 for Gasohol95 -4.76 for Diesel
Gasohol95 39.63
Diesel 29.99
ULG 95 47.15
26.90
25.09
33.96
New Gov.
Dubai
107.11
58.59
New Gov.
USD/BBL THB/Litre
10.50
8.50
THB/Kg THB/Kg
22.63
15 10
2014 Year in Review Performance 2015 Outlook
Energy Price Reform: LPG Prices
E & P Gas Oil & Trading Refining PetChem Others
CP-20 $/ton or 423 $/ton
Lifted GSP Capped Price from 333 USD/TON to reflect GSP Cost
GSP 3.6 Mil. Ton
(48%)
Imported 2.0 Mil.
Ton (27%)
Refinery 1.9 Mil.
Ton (25%)
488 $/TON
or 16.11 ฿/kg
CP+85 $/ton or 528 $/ton
498 $/ton
*CP Jan’15= 443 $/ton
Tax 2.39 ฿/kg
Margin 3.26 ฿/kg
Oil Fund 0.82 ฿/kg
VAT 1.58 ฿/kg
Oil Fund AS
CLEARING HOUSE
Margin 3.26 ฿/kg
VAT 1.19 ฿/kg
Tax 2.39 ฿/kg
No oil
Fund
24.16 ฿/kg
18.13 ฿/kg
Cooking
Transport
Industrial
Low income
Need subsidy
4.81 ฿/kg
2014 Year in Review Performance 2015 Outlook
15 LPG prices for Petchem : not controlled, but linked to market price and/or contract price
4,291
4,515
4,616 4,754
4,704
4,685
4,497 4,469
4,450
4,768 4,731
4,802
Q1 Q2 Q3 Q41,165 1,070 1,228 1,206
932 1,034 873 852
681 695 611 699
945 1,034 930 959
689 653 640 655 319 316 307 317
Q3/14 Q4/14 2013 2014
Gas Performance:
NG volume maintain growth under political uncertainty in Y2014
NG Sales Volume* NG Customer Breakdown
2013
2012
2014
MMSCFD
EGAT (26%)
IPP (18%)
SPP (15%)
GSP (20%)
Industry (14%) NGV (7%)
MMSCFD
4,802 4,731 AVG.
4,688
4,544
4,589
4,589
E & P Gas Oil & Trading Refining PetChem Others
2% YoY
8.87 8.79
8.54
8.82
Q3/14 Q4/14 2013 2014
1% QoQ
NGV Sales Volume
Unit : Approx. KTon/Day
Vol. MMCFD
319 316 307 317
3% YoY QoQ
• NG volume increased mainly from higher IPP and GSP demand.
• Lower NGV sales volume from price adjustment.
YoY
• NG volume increased mainly due to higher demand from SPP, GSP and industrial customers.
• NGV sales volume slightly increased by 3%
QoQ
• Higher NGV Sales volume due to NGV Station back to normal operation after closed during political demonstratiionon
YOY
• Sales volume increased by 5%, also, feed cost increased
• No Government subsidy, while special discount given to public transportation customers
Key Highlights
SM: GSM, NGR, CHP margin +1.75% no cap for internal use, external cap according to price structure
4,688
2% QoQ
Convention เพ่ิม 2 สถานี Mother Daughter ที่เพ่ิมข้ึนเป็นของเอกชน
* NG Sales Volume include Inter-BA Transaction
Gas BU Performance:
Better performance from GSP#5 back to normal operation
K.Ton/Day
16
2014 Year in Review Performance 2015 Outlook
7,092 3,290
18,436 20,456 6,681 5,874
24,984 26,071
5,190 3,637
13,663 20,030
(5,082) (4,865)
(18,981) (19,962)
1,959 1,744
6,734
7,507
Gas - EBITDA
MMTHB Others
TM
GSP
15,840
Q3/14 Q4/14 2013* 2014
44,836
39% QoQ
S&M
NGV
720 714
2,690 2,739 184 179
705 728
532 597
2,075 2,106
162 244
727 819
Q3/14 Q4/14 2013 2014
6,197
GSP Sales Volume
LPG (43%)
kTon
1,598 1,734
6,392
9% QoQ
3% YoY
Gas Performance :
Higher NG sales and stronger GSP Margin drove performance
17
E & P Gas Oil & Trading Refining PetChem Others
QoQ
• Lower NGV loss from sale volume decrease
• GSPs performance declined from margin squeeze
• Gas BU’s EBITDA decreased from lower GSPs margin and conversion factor changed impacted COGS of GSM
YoY
• Better performance from Myanmar Gas shortfall and higher NG sales volume for SPP customer, better GSP’s margin, higher GSP sale volume
• More loss on NGV from increased volume
Propane (13%)
NGL (11%)
Ethane (33%)
Key Highlights
9,680
21% YoY
*Restated
391 382 403 389
832
577
842 786
1,604 1,448 1,487 1,544
1,620 1,459
1,516 1,572
Q3/14 Q4/14 2013 2014
333
GSP - Reference Product Prices
PP
HDPE
Naphtha
USD/Ton
Feed Cost*
LPG Capped 333 333 333
* Revised Feed cost due to re-calculated with GSP production volume instead of sale volume
Q3/14 Q4/14 2013 2014 20142
S&M 7,092 3,290 18,436 20,456 20,456
TM 6,681 5,874 24,984 26,071 26,071
GSP 5,190 3,637 13,663 20,030 20,030
NGV (5,082) (4,865) (18,981) (19,962) (19,962)
Others 1,959 1,744 6,734 7,507 7,507
Total 15,840 9,680 44,836 54,102 54,102
15,840 9,680 44,836 54,102 54,102
12% -39% - 21%
54,102
2014 Year in Review Performance 2015 Outlook
Gas BU:
Gas Consumption keep growing in line with GDP Growth
• Long term gas demand, close to GDP as our major customer is power sector
• Power sector: 60% using gas, in term of vol still growing but for % might be lower
• GSP5 will S/D only 15 days for installation of WHRU in Sep’14
Awarded IHI Corporation and Posco Engineering, Consortium (IHI-PEN) as an EPC contractor
Completed 24.7% of construction phase i.e. piling for LNG tank #3 & #4 complete , working pile load test for jetty
Expected completion early 2017
LNG Terminal phase II progress
E & P Gas Oil & Trading Refining PetChem Others
Awarded McConnell Dowell Constructors Thai Ltd. as a new 4th onshore pipeline construction contractor and Christiani & Nielson(Thai) Co.,Ltd. as a new Block Valve construction contractor
Progress as of Dec14 (only from new contractor)
: Pipeline 35.16% : Block Valve 35.24%
Expected completion by 3rd quarter 2015
4th Onshore pipeline progress
2014 Year in Review Performance 2015 Outlook
18
684 712 2,359 2,751 2,442
(948)
10,938 8,827
Q3/14 Q4/14 2013 2014
3,126
(236)
11,578
13,297
0.77
0.51
0.80 0.82
Q3/14 Q4/14 2013 2014
Oil Performance :
Stock loss hurts performance
Contribution Margin 1/
Oil - EBITDA Key Highlights
MMTHB
THB/Liter
1/ Excluded non–oil business
19
QoQ
• Margin squeezed from stock loss and a drop in oil prices • Volume increased mainly from higher demand following lower oil
prices • EBITDA turned negative mainly due to stock loss and and
inventory losses from NRV YoY • Better margin mainly from high gasoline and aviation margin • Better sales volume mainly from gasoline and aviation • Better non-oil business performance following branch expansion • EBITDA decreased mainly from higher stock losses and inventory
losses from NRV
Oil
Non-Oil*
E & P Gas Oil & Trading Refining PetChem Others
* EBITDA from Operating
3% YoY
13% YoY
5,943 6,209
23,981 24,657
Q3/14 Q4/14 2013 2014
Sales Volume 2/
MM Liter
2/ Only PTT and PTTRM
3% YoY
33% QoQ 4% QoQ
108% QoQ
2014 Year in Review Performance 2015 Outlook
19
Meeting Godji Family at PTT Life Station
Promoting substitute energy via distribution hub of Gasohol E85
รับรางวัลระดับสากลจาก “แพลท” สะท้อนความแข็งแกร่งด้านความโปร่งใสและยั่งยืน
E & P Gas Oil & Trading Refining PetChem Others
Oil BU : Going Forward Moving toward sustainable growth
Rank 24th in Platts Top 250 Global Energy Company Ranking 2014
2014 Year in Review Performance 2015 Outlook
20
20
1,010
(331)
5,418 5,069
Q3/14 Q4/14 2013 2014
0.07 0.06 0.08
0.11
Q3/14 Q4/14 2013 2014
20,429 19,527
75,545 74,200
Q3/14 Q4/14 2013 2014
Trading Performance :
Domestic condensate drives performance
Contribution Margin*
Trading - EBITDA*
Sales Volume
Key Highlights
MMTHB
THB/Liter MM Liter
* PTT only : FX Adjustment in compliance with Accounting Standard 21
QoQ
• Lower margins from higher condensate discount following lower crude oil prices
• Sales volume decreased mainly from conservative crude trading during oil prices decline
• EBITDA turns negative mainly from doubtful debt YoY • Margins surged from lower condensate discount rate • Lower sales volume mainly due to a drop in crude import • EBITDA decreased mainly from doubtful debt despite better
margins ** Not restated
6% YoY
• Import parity • Basket price or
reference price
133% QoQ
32% YoY 14% QoQ
2% YoY
4% QoQ
* PTT only : FX Adjustment in compliance with Accounting Standard
E & P Gas Oil & Trading Refining PetChem Others
2014 Year in Review Performance 2015 Outlook
21
Refineries : Key Events 2014
22
Jun: CDU-3 Major Turnaround : 15 Jun- End July ~46 Days
Aug: COD of key margin improvement products i.e. HVU-2 revamp, CDU-3 Preheat Train
Mar: T/A 18 Mar - 9 Apr
Jun: Fire incident in Vacuum Gas Oil Hydro Treating Unit (VGOHT):
VGOHT Unit: Reconstruction on schedule, expect start up Apr. 2015
Insurance claim: 1,710 MB in 2014
Sep: Dispute settlement between IRPC and Liaopairattana family
Dec: JV with PCC Rokita SA, Poland
Apr: COD Solar: Phase 3 (48 MW PPA)
May: T/A 1May- 15 Jun (46 Days) scheduled Shutdown of Crude Distillation Unit (CDU)
Jul: BCP acquired 81.41% shares of Nido Petroleum Limited following tender offers
Aug: Purchase ordinary shares of 85% of “BCP Bioethanol”
Dec: Purchase of shares in Galoc Production Company WLL by Nido
Feb : Major Turnaround 8 Feb- 18 Mar (38 Days)
Apr : 3 projects (FCCR revamp ,PGP recovery ,APH) to improve operations were completed
Dec : The Cabinet approved COA Amendment
E & P Gas Oil & Trading Refining PetChem Others
2014 Year in Review Performance 2015 Outlook
(2,175)
(6,479)
9,316
(4,026)
(213)
(6,100)
3,977
(6,367)
381
(2,489)
4,652
712 22
(5,779)
826
(5,235)
Q3/14 Q4/14 2013 2014
64%
89% 89%
82%
327
207
289 268
371
252
486
279
Q3/14 Q4/14 2013 2014
101.5 74.4 105.5 96.6
4.29 6.88
3.77 4.75
0.83
(4.23)
4.75
1.17 1.99
(2.40)
7.76
3.10
Q3/14 Q4/14 2013 2014
QoQ • Mkt GRM increased mainly from falling crude oil price (Q3/14:
101.5$/bbl, Q2/14: 106.1$/bbl)
• Q3/14 has large stock loss while Q2/14 had stock gain then A/C GRM decline pretty sharply (Ending Dubai Q2’14>Q3’14 : 108>96$/BBL
whereas Q1’14<Q2’14 : 104<108$/BBL), (stock loss 4R exclude PTTGC (Q3/14= -4.18 $/bbl., Q2/14= +1.06$/bbl)
• Recovered PX spread (PX-ULG95: Q3/14= 371$/ton, Q2/14=220$/ton) from several PX producers cut runs and some plants’ maintenance (also
postponed PX plant start up in SG capacity 800,000 tons/yr. from Aug. to Sept.)
• BZ spread also improved from capacity declined (producers in Japan cut
runs, and postponed operation in SG) in contrast to its improving demand (from imported demand in US, resumed phenol operations in Japan using BZ as feedstock)
YoY • A/C GRM decreased mainly from lower Mkt GRM & more stock loss • A/C GIM also drop from PX spread tumbled on softened polyester
demand & additional PX supply • Lower utilization rate from major refineries’ T/A
Source : PTT, Refining Associates Note: Weighted Avg. GRM of PTT’s associates’ complex refineries (TOP, SPRC, BCP, and IRPC) Weighted Avg. GIM of PTT’s associates’ integrated refineries (TOP and IRPC) Account GRM/GIM = Market GRM/GIM + Hedging Gain/Loss + Stock Gain/Loss
(0.16)
0.95
(0.90)
GRM/GIM
Refinery Utilization
USD/BBL
A/C GRM
A/C GIM Mkt GRM
Dubai
E & P Gas Oil & Trading Refining PetChem Others
Net Income (100%)
U-Rate (%) Q3/14 Q4/14 2013 2014
Aggregated U-Rate
85 97 94 87
TOP 85 108 102 98
IRPC 77 84 84 80
SPRC 103 103 104 91
BCP 81 85 83 72
Aggregated Intake (KBD) 685 761 671
7% YoY 13% QoQ
-4.08 -11.23 0.55 -4.12 Stock Gain/Loss
735
1,120 SPRC: -213
3,783
-54
2,094
TOP: -2,175
9,307
2,453
178
IRPC:22
42
544
1,258
BCP: 380
3,963
3,200
Q2/14 Q3/14 9M/13 9M/14
MMTHB
BCP
IRPC
SPRC
TOP
4,650
-1,986
7,916
54% YoY 143% QoQ
17,094
(31 days ) T/A
Aromatics
Aromatics Production
BZ-ULG95 PX-ULG95
BZ: 7% YoY
PX: 43% BZ: 37%
QoQ
PX: 32%
QoQ
A/C GIM: 221%
YoY
A/C GIM: 60%
+ Insurance Compensation : 521 MB in Q2/14 + Recognized revenue (of 743 Baht million) from fully-operated all 3
phases of Solar Power Plant - Lower A/C GRM (9M/14= 5.34$/bbl, 9M/13 =7.45$/bbl) - Lower U-Rate (T/A 46 days in Q2/14)
TOP 6,854
SPRC 4,050
BCP 763
IRPC 502
- Lower A/C GIM (9M14= 4.70$/bbl, 9M13=8.27$/bbl) from weaken crack spreads and PX spread
- Stock loss due to drop in Dubai price (9M14 stock loss 3,985 MMTHB while 9M13 stock gain 1,378 MMTHB)
- Lower integrated intake from planned major T/A of refinery and aromatics plant (Mid June- End July ~ 46 days)
- Pressured Aromatics : PX margin tumbled
+ Non-recurring items: insurance claim (710 MB), reverse impairment (470 MB), sales of investment (150 MB), etc.
- Lower A/C GIM (drop by 1.3$/bbl) from; the stock loss (decrease 1.44$/bbl), and Mkt GIM decrease (by 0.77$/bbl) while increase in oil hedging gain (increase 0.92$/bbl)
- T/A 23 days (18 Mar – 9 Apr)/ Fire incident on 9 June
- Lower A/C GRM (9M14= 2.72$/bbl, 9M13=5.34$/bbl) - Plant Turnaround: 8 Feb – 7 Apr (total S/D)
9M14 Vs. 9M13
Split stack to bar graph like GRM/GIM
4,650
(20,847)
18,771 950% QoQ 180% YoY
Refining Business Performance:
More stock losses and pressured Aromatics
23
(1,985) (14,916)
2014 Year in Review Performance 2015 Outlook
23
Feb: PTTGC had planned shutdown of Olefins Plant I-1 and unplanned shutdown of Plant I4-1.
Aug: Purchased 34% of the registered capital in Vencorex from Perstorp, making % holding in Vencorex changed from 51% to 85%.
Sep: ARO 2 (capacity 1.07 ton/year) had unplanned S/D.
Petrochemical : Key Events 2014
24
• Better PP spread than planned
• Smooth Operation & no unplanned S/D
E & P Gas Oil & Trading Refining PetChem Others
2014 Year in Review Performance 2015 Outlook
• Smooth Operation & no unplanned S/D
691 802
566 682 698
819
585 687
Q3/14 Q4/14 2013 2014
83% 63% 90% 81%
3.83 4.91 3.52 4.41
1.61
(7.69)
5.14
0.98
Q3/14 Q4/14 2013 2014
430
320 380 375
479
400
557
400
Q3/14 Q4/14 2013 2014
Net Income (100%)
Aromatics
Unit : MMTHB
7,590
-4,935
33,140
15,036
Q3/14 Q4/14 2013 2014
PTTGC
HMC
Others
8,657
40% YoY
618 691
558 643
Q2/14 Q3/14 9M/13 9M/14
Olefins U-Rate
94% 101%
90% 91%
Olefins
HDPE-Naphtha
USD/Ton
BTX U-Rate
102% 101% 91% 102%
Refineries
CDU U-Rate
Stock G/L
A/C GRM Mkt GRM
BZ-Cond
PX-Cond
BZ-Cond: 1%
YoY
PX:-Cond 28%
(0.91)
1.11
(0.69)
-2.92 -14.68 0.84 -4.36 Stock Gain/Loss
QoQ 578%:A/C GRM BZ-Cond: 26%
QoQ
PX-Cond: 16%
142% QoQ
Petrochemical Business Performance: Stock loss and plummeted Aromatics offset by solid Olefins
34,625
20,624
YoY 81%:A/C GRM
QoQ
- Refinery business dip as A/C GRM decreased
(Q3/14 =1.64$/bbl, Q2/14= 5.83$/bbl) from stock loss (Q3/14 =
-2.76$/bbl, Q2/14= +0.73$/bbl) with maintained U-rate
+ Olefins business better from higher U-rate in Q3 (with full GSP#5 resumption), and improved Olefins spread
+ Aromatics business recovered from both PX and BZ spreads (PX spread rose by 43% from 334 $/Ton in
Q2’14 to 479 $/Ton in Q3’14 as well as BZ enhanced by 16% from 370 $/Ton to 431 $/Ton)
+There was one-off transaction from Vencorex (French entity) in Q2’14 amounted 1,180 MB (consisted of asset impairment 750 MB and provision cost of employee & others 430 MB according to implementing new strategy)
YoY
+Olefins improved: most spreads largely improved (HDPE-Naphtha: 9M14= 642$/ton,
9M13= 558$/ton)
- Refinery declined: A/C GRM decreased (9M14
=3.84$/bbl, 9M13= 5.06$/bbl) from stock loss (9M14= -0.93$/bbl, 9M13= 0.73$/bbl)
- Aromatics downturn: PX spreads tumbling (drop by 30% from 573 $/Ton in 9M13 to 400 $/Ton in 9M14)
- Vencorex restructuring cost and impairment in
Q2/14 amounted 1,180 MB
HDPE-Naphtha
PP-Naphtha
HDPE-Naphtha: 16%
QoQ
PP-Naphtha: 17% HDPE-Naphtha: 20%
YoY
PP-Naphtha: 17%
25
(3,652)
2014 Year in Review Performance 2015 Outlook
25
E & P Gas Oil & Trading Refining PetChem Others
62 59
73
64
40 37
47 42
68 64
85
71
Q3/14 Q4/14 2013 2014
Other Businesses : Coal - SAR (94.58%) Cost reduction initiatives relieved effect from continuing coal price declined
EBITDA & Net Income (100%)
Sales Volume
Key Highlights
MMUSD
USD/Ton
1,501 1,645
8,196 6,773
802 598
2,991 3,072
2,303 2,243
11,187 9,845
Q3/14 Q4/14 2013 2014
kTon
Jembayan
Sebuku
Avg. Selling Price (ASP)
Cash Costs
E & P Gas Oil & Trading Refining PetChem Others
3% QoQ
Avg. Selling Price & Cash cost
New Castle
SAR negative profit in Q2 is mainly due to extra expenditure US$ 3.6mn on tax settlement (corporate income tax) of BCS 2012 with Indonesia Tax Office (ITO). BCS is one of SAR subsidiaries in Indonesia, who handle coal sales to Tiger Energy Trading in Singapore.
5%
12% YoY
36.7 32.4
187.9
145.7 EBITDA 12% QoQ
NI 1,200% QoQ
NI 0.1
-1.1
Q3/14 Q4/14 2013 2014
EBITDA 22% YoY NI 26% YoY
9.4 7.0 EBITDA
6%
8%
12%
16%
11%
26
QoQ
• Cash cost improved from new contract negotiation with mining contractor and logistic contractor.
• Sales volume slightly lower since lower coal sales at Sebuku to relieve impact during coal price down turn.
YoY
• ASP dropped significantly but less than NEWC because of marketing initiatives to lock up price in spot contract before price going down further.
• Net income decreased due to extra expenditure on tax settlement, Indo restructuring and write-off Project Cambodia.
2014 Year in Review Performance 2015 Outlook
26
521 424
1,553
1,789
Q3/14 Q4/14 2013 2014
Net Income* (100%) Sales Volume
Key Highlights
MMBaht GWh 15% YoY
Other Businesses : Power - GPSC (30.10%)
Better performance supported by higher steam sales
2,102
1,966
7,850 7,573
1,245 1,279
4,496
4,981
Q3/14 Q4/14 2013 2014
kTon
E & P Gas Oil & Trading Refining PetChem Others
Capacity*
*Power only (excludingSteam) According to Business Plan 2014-18 (@ 4 Mar 2014 (To be revised) ** By year-end 2014
4%
3%
11% 19% QoQ
*Adj.TFRIC 4
QoQ
• Lower power sales volume from Sriracha plant S/D and lower demand from EGAT.
• Higher steam sales volume due to major customers back to normal operation
• Performance dropped from lower EGAT selling price and power sales volume from Sriracha plant.
YoY
• Power sales volume dropped mainly from Sriracha plant because of lower demand from EGAT.
• Steam sales volume increased mainly during Q2/14 due to higher sales to major customers.
• Better performance from higher steam sales.
ราคาขายไฟฟ้าให ้EGAT จะแพงสดุในชว่ง Q2 –Q3จะนอ้ยลง
Power Steam
6%
MW
1,200 1,448
321
345 32
32 1,553
1,825
2013 2014
Renewable
Conventional
*Power only (excluding Steam)
Hydro
27
2014 Year in Review Performance 2015 Outlook
27
Other Businesses : Power – GPSC (30.10%) Project update
E & P Gas Oil & Trading Refining PetChem Others
GPSC Initial Public Offering (IPO)
Preparation
• Completed its conversion into a public
company limited as “Global Power
Synergy Public Company Limited” (the
“Company”) on 27 November 2014
• On Nov 28,2014 Submitted the
registration statement (Form 69-1) and
the prospectus (Form 72-1) to SET
Navanakorn (NNEG) Expected to COD - Q3/2016
IRPC-CP Construction Progress as of Dec is 91.63% (Phase I), Expected to COD – Q1/2015 (Phase I)
Nam Lik 1 Construction Progress as of Dec is ~ 14.7%, Expected to COD - Q3/2017
Xayaburi Construction Progress as of Sep is ~ 40.9%, Expected to COD - October 2019
Progress Update (Q4/14)
Addition 1,000MW during 5 Years
2014 2015 2016 2017 2018 2019
5 Years Investment plan
1,825 MW
2,701 MW
Highlight Planned Activities 2015
Key Activities 2014
All 7 assets transferred from PTT to GPSC
28
2014 Year in Review Performance 2015 Outlook
28
101.5 74.4 105.5 96.6
24,558
-26,649
93,091 55,795
Q3/14 Q4/14 2013 2014
PTT Consolidated Performance: 2014
29
Dubai (USD/BBL)
2014 2013
40%
31%
18%
9% 2%
70%
22%
4% 4%
PTT - Oil & Trading
PTT - Gas
Others
PTTEP
757,619 643,851
Q3/14 Q4/14 2013 2014
21%
71%
17%
-10% 1%
PTT
PetChem
Others
PTTEP
Refining
Net Income
Unit : MMTHB
EBITDA
Net Income
Revenue
70%
18%
8% 4%
PTT - Oil & Trading
PTT - Gas
Others PTTEP
Revenue
EBITDA
72%
17%
7% 4%
71%
20%
5% 4%
Revenue
EBITDA
Net Income
30%
46%
17%
-5% 4%
72%
17%
7% 4%
69%
24%
4%
3%
Revenue
EBITDA
Net Income
Q3/14
209%
15%
0.3% 2,842,408 2,834,732
66,052 51,854
228,541 251,025
Q3/14 Q4/14 2013 2014
22%
10%
40%
2014 Year in Review Performance 2015 Outlook
29
PTT Group Performance : 2014 (YoY)
% share
Unit : MMTHBY2013
(Restated)Y2014 YoY
Y2013
(Restated)Y2014 YoY
PTT Net operating Income 28,454 39,347 38% 28,454 39,347 38%
E&P - PTTEP 56,155 21,490 -62% 65.29% 37,139 11,450 -69%
- PTTGC 33,140 15,036 -55% 48.89% 16,825 7,007 -58%
- HMC/PPCL/PTTPL/PTTPM/PTTAC/ PTTES/
PTTME/PTTMCC/PMMA1,485 5,588 276% 40-50% 184 2,560 1291%
Petrochemical 34,625 20,624 -40% 17,009 9,567 -44%
- TOP 9,316 -4,026 -143% 49.10% 4,209 -1,903 -145%
- IRPC 826 -5,235 -734% 38.51% 1,265 -1,980 -257%
- SPRC 3,977 -6,367 -260% 36.00% 1,393 -2,051 -247%
- BCP 4,652 712 -85% 27.22% 1,258 187 -85%
Refining 18,771 -14,916 -179% 8,125 -5,747 -171%
Inter - PTTER, PTTGE -2,701 -5,600 -107% 100% -2,770 -5,586 -102%
Gas -PTTNGD/ TTM(T)/ TTM (M)/ PTTLNG 3,615 4,893 35% 50-100% 2,475 3,596 45%
Utilities -GPSC/ TP/ DCAP/ CHPP/ BIP/ BIC/ NNEG 1,376 2,982 117% 20-30% 628 866 38%
Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/Others 2,361 2,217 -6% 33-100% 2,031 2,302 13%
Others Business 4,651 4,492 -3% 2,364 1,178 -50%
Shared of Net Income from Affiliates 114,202 31,690 -72% 64,637 16,448 -75%
PTT Conso. Net Income 142,656 71,037 -50% 93,091 55,795 -40%
Performance 100% Equity Method % PTT
30
2014 Year in Review Performance 2015 Outlook
Free Cash flow
70,243 91,306
Investing
2013 -95,264
2014 -144,061
CAPEX(PP&E, Intangible asset) -114,457 -128,452
Investment (Sub. &Affiliates) -11,255 -26,854
Dividend/Interest Received 18,488 13,882
Others 11,960 -2,637
Operating
2013 165,507
2014 235,367
Net Income 93,091 55,795
Changes in assets & liabilities -25,218 11,545
Income Tax -45,822 -49,826
Non-Cash Adjustment 127,702 199,093
Interest-net 15,754 18,760
Ending Cash & Cash Equivalents
157,683 203,785
Beginning Cash and Cash Equivalents
136,924 157,683
Cash In/(Out)
20,759 46,102
Adjustment
6,586 2,111
31
Financing -56,070 -47,315
Repayment Loans -77,005 -49,559
Interest paid -20,089 -20,980
Dividend paid -46,368 -48,837
Received from share issue 280 32,335
Received from loans/Bonds 87,112 39,726
Statements of Consolidated Cash Flows
2014 Year in Review Performance 2015 Outlook
31
10.5
13.6
0.4 0.3
1.4 1.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
6.0
8.0
10.0
12.0
14.0
2013 2014
Other Liabilities
PP&E
Others Non-
current Assets
Other Current Assets
L/T Liabilities (incl. due within 1 yr)
Total Equity
MMTHB
Cash & S/T Invest
31 Dec 13 30 Sep 14
1,805,041 1,818,746
Statement of Financial Position
PTT Ratings at Sovereign Level
− FC : Moody’s (Baa1), S&P (BBB+),
JCR (A-), FITCH (BBB+)
− LC : Moody’s (Baa1), S&P (BBB+),
JCR (A), FITCH (A-)
Net Debt/EBITDA ≤ 2.0
Net Debt/Equity≤ 1.0
ICR*
*ICR = (Net cash flow from operating activities +Taxes paid from operating activities) divided by Interest paid from financing activities
739,785 720,335
541,678 566,881
363,206 267,201
160,370 224,762
822,842 867,342
471,395 453,484
510,802 458,353
1 2 3 4 5
1.4%
1,805,039 1,779,179
31 Dec 13 31 Dec 14
Decreased assets :
• Dropped in A/R mainly from decreases in sales
volume and selling price of an International
Trading Business
• Decrease in petroleum exploration and production assets of PTTEP due to assets swap of Canada Oil Sands KKD project and the impairment losses on assets of PTT Australasia project
32
2014 Year in Review Performance 2015 Outlook
7.71 8.75
13.43
22.40
30.5734.14 34.82
18.3321.06
29.58
37.24 36.58
32.52
19.33
2.50 2.85 4.006.75
9.25 10.50 11.508.00 8.50
10.2513.00 13.00 13.00
11.00
25% 25%
32.4% 32.6% 29.8% 30.1% 30.3% 30.8% 33.0%43.6% 40.4% 34.7% 34.9% 35.5% 40.0%
56.9%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Dividend Policy & Historical Payments
33
PTT’s minimum payout ratio
PTT is firmly committed to pay dividend at no less than 25% of net income
Baht / share
EPS
DPS
Dividend payout
2014 Year in Review Performance 2015 Outlook
6.00
5.00
Interim
Contents
34
2014 Year in Review
Performance
2015 Outlook
2014 Year in Review Performance 2015 Outlook
North America (1)
1 Exploration
Canada
Africa and Middle East (7)
1 Production
1 Development
5 Exploration
Algeria
Mozambique
Kenya
Oman
Thailand (17)
14 Production
1 Development
2 Exploration
Southeast Asia (15)
6 Production
9 Exploration Vietnam
Indonesia
Myanmar
Australasia (1)
1 Production
Australia
7 / 18
LNG
Deepwater Gas (LNG)
Economic Outlook : Challenges Ahead For Y2015
Thailand market: Govt. stimulus package will boost economy : Government investment will drives Thai economy growth
Clarity in government policy helps to lift private sector’s confidence : Delays in infrastructure spending will delays investment project
US Market : Economy Expands to boost consumer spending
: Fed plans to increase interest rates in Y2015
: US Economic Recovery Consumer spending expansion from declining global oil price
EU market: Aggressive ECB Stimulus : EU Economic impact of QE
: Risk of stagnation and prolonged deflation Russia Economy under pressure from western sanction and falling oil price
China market: Slowing down for sustainable growth : Low inflation allows easing monetary policies
: IMF revised Chinese GDP Forecast down to 6.8% in Y2015
Continuing to face slumping Chinese real-estate market
AEC market : Robust Economic Growth : IMF uplifted forecast ASEAN-5 GDP growth in 2015 around 5.2%
: Exchange rate volatility
PTT Performance: Brighten future : Unlocked PTT pendulums (LPG, NGV, Non-productive investment)
: Uncertainty on oil price
Greece out of EU ?? 1€ = 1$ ??
2014 Year in Review Performance 2015 Outlook
35
Growth in shale production
Lower-than-expected heating demand and higher natural gas production
Factors to watch
US LNG Export Terminal Projects
Source : Short term 2014 Outlook, July 2014 EIA, Street Research, Bloomberg and PTT
Henry Hub Natural Gas Price Forecast
Henry Hub / JKM Price Outlook: Gas Price trend to move lower from higher supply
36
LNG Global Demand/Supply
Higher spot LNG cargo in market due to high temperature than normal in Japan during winter season
Japan-Korea Market Price Forecast
Excess Supply expected in L-T
Expected JKM price 2015 = 7-9 $/MMBtu
EIA’s projected HH Price in 2015 is 3.05 $/MMBTU
Factors to watch
Korea Nuclear Reactor will be allowed to restart
Average JKM price 2014 = 14.89 $/MMBtu
Average HH price 2014 = 4.26$/MMBtu
Current price @ 6.80 $/MMBtu
2014 Year in Review Performance 2015 Outlook
45.01 44.52 44.17 45.50 47.03
51.19 55.04
57.79 60.38 63.04
64.26
30
50
70
90
110
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15WTI Brent Dubai Dubai Forecast (PTT Group PRISM) Column2
2014 Dubai $96.6/bbl
Dubai Forecast Y2015 Range $50-60/bbl
106.2 106.3
105.6 105.7 106.0
Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14WTI Brent Dubai Dubai Forecast (PTT Group PRISM) Column2
2013 Dubai $105.5/bbl
2014 1H Dubai $105.3/bbl
Dubai Forecast 2H 2014 Range $105-$107/bbl
Geopolitical risk remain high
Reduction of the US oil rig count
37
“OPEC spare capacity trend to rises in 2015 However, rising geopolitics and falling oil rig count helped a price rebound”
Dubai $105/bbl
Dubai $105/bbl
Dubai $103/bbl
Source: (PTT Group) Estimated (02.02.2015)
Revised
Crude Oil Outlook: Overwhelming supply pressure oil price
Peak Global refinery maintenance in Q2’15
Slowdown of the Chinese economy
Crude Oil Price Forecast in Y2015 range bound 50-60 $/bbl
Psychology level @ 100 USD/BBL
Factors to watch
World Oil Demand/Supply Balance
Source: Barclays , IEA
Geopolitics
Shortage
surplus surplus
surplus
US
D/b
bl
2014 Year in Review Performance 2015 Outlook
“Asian Refineries will start going under maintenance and
will be peak mid-May.”
Source: FACTS, DB, KBC, Reuters , IEA, Reuters, Thaioil and PRISM Estimated (July 2014)
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15
Upcoming US driving Season in Q2’2015
Spring refinery maintenance in Region and US
Forecast
GO
Mogas
FO Yanbu and Ruwais refineries ramp up in Q2’2015
Less Mogas demand after Indonesia and Malaysia cut subsidies
Singapore GRM Forecast in Y2015 to be around 6-7$/bbl Factors to watch
“Expected new barrels from AP/ME are expected to
continually flood the petroleum product market”
Refinery Margin Outlook : Refinery margin remains stable during harvest season
Refinery Maintenance in Asia-Pacific Area CDU Additional Vs Additional Demand –AP&ME
V Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
Demand Growth Supply Growth
Note: Adjusted capacity based on start-up period (Effective additional capacity) Source: FACTs Semi Annual Reports, October 2014, reuters, Bloomberg, TOP estimate
US
D/b
bl
2014 Year in Review Performance 2015 Outlook
38
Ample supply amid generally high cracker run-rates in Japan, South Korea and Taiwan, and New Capacity 6.7M Ton come on stream
Fluctuation in upstream feedstock prices, buyers deferred any unnecessary purchases to keep inventories at low level
0
200
400
600
800
Ja
n-1
4
Ju
l-1
4
Ja
n-1
5
Ju
l-1
5
Spread HDPE Spread PP
US
D/T
on
Olefins Product Spread
Petrochemical Outlook : Olefin spread stable from restocking after Chinese New Year
Source: HIS, ICIS and PRISM 39
Asia Ethylene Supply/Demand Balance
Factors to watch in 2015
• HDPE-Naphtha expected to be around 590-730 USD/TON
• PP-Naphtha expected to be around 610-660 USD/TON
Y 2015
Ethylene supply in Asia remains long relative to downstream derivatives demand in the region. The continued weakness in the global energy and feedstock market meant that buyers expected a weaker monomer price going forward and thus deferred any unnecessary purchases. With the slowdown in demand growth expected to drag well into the first quarter of 2015, most downstream derivative producers have taken actions to cut back on operating rates going forward. This will have a corresponding impact on the feedstock monomer market. The supply situation is expected to remain quite stable going into the next quarter as the next wave of cracker maintenances will start from the second quarter of 2015. In production news, South Korea’s LG Chemical started up its Yeosu cracker at the end of November following a shutdown for maintenance and expansion. Overall cracker operating rates for Northeast Asia and Southeast Asia in December are estimated at 93% and 81%, respectively, while those for January are forecast at 92% in Northeast Asia and 83% in Southeast Asia.
Supply of propylene in Asia remains long due to ample supply from regional producers. Demand from downstream derivative units remained weak going into the year-end and the beginning of 2015. With ample supply in the region, there was little hurry to commit to the spot market as market players expect the monomer prices to continue on a downtrend—dragged lower by the weak global energy and feedstock prices, as well as the significant length in the region. In China, Bohai Chemical’s PDH unit in Tianjin was expected to start up on 20 December after a shutdown that began in mid-October. Domestic supply remained relatively long in East China as PDH operators were selling propylene into the market. Shandong Shenda’s new MTO unit was reported to have started up in early December, but it shut down thereafter for some readjustment work. Fund Energy (Ningbo)’s MTO unit restarted production on 7 December after maintenance. In Taiwan, Formosa’s No.1 RFCC unit started up in early December after an unplanned outage lasting 2-3 weeks. However, this was followed by another outage at its No.2 RFCC unit in mid-December. Non-steam cracking operating rates for Asia in December and January are estimated at 91% and 92%, respectively.
Asia Propylene Supply/Demand Balance
Ava
ila
bil
ity
Anticipated increase demands in US, China and Indonesia
2014 Year in Review Performance 2015 Outlook
Petrochemical Outlook: Expect PX margin to recover from Lunar New Year Demand
40
Anticipated increase demands due to positive boost on America's economy, and new downstream plans start up in China Ample supply in Asia as a result from new plant start up
Buyers are wait-and-see for the prices to be stabilize
Aromatics Product Spread
Factors to watch in 2015
• Bz-Naphtha forecasted to be around 160-290 USD/TON
• PX-Naphtha forecasted to be around 310-420 USD/TON
0
200
400
600
800
Ja
n-1
4
Ju
l-1
4
Ja
n-1
5
Ju
l-1
5
Spread BZ Spread PX
US
D/T
on
Supply / Demand The polyester industry continues to reap benefits of falling prices. Overall demand has been significantly improved since November and this has had a positive impact on the demand upstream. PX demand has been at its strongest in the past couple of months. However, consumers have not lost sight of the upcoming Lunar New Year in late February and we estimate that the overall cargoes fixed for February shipment by now is lower to compensate for any drop in demand during and after the holidays. Consumers have been cautiously optimistic about a sharp recovery in demand which is reflective in the level of activity seen for March shipment cargoes. Just to remind everyone, a March shipment cargo translates into polyester recover in April, accounting for the normal time required in transit. In trade, China’s monthly imports dropped to 749 kt in October against a monthly average figure of 800 kt. Final import statistics are available till November and indicate that imports jumped to 944 kt and preliminary data for December indicates a further increase to 1,179 kt. Clearly the shutdown of CNOOC and lower operations in Lidong necessitated higher imports, but even then the volumes in these two months is significantly in excess of China’s requirement and based on our estimates has resulted in an inventory buildup in excess of 200 kt in these two months. Exports from South Korea have jumped in 2H 2014 as three new world scale plants came on-stream. Total exports from South Korea were about 2 million mt in 2012, 3 million mt in 2013 and 4 million mt in 2014. At the end of 2014, average exports from South Korea were about 500 kt per month, a level that is not sustainable unless production in other places drops to accommodate this extra volume. On the supply side, poor economics has forced a reduction in the transalkylation streams in many plants, and even condensate based economics is taking a major beating. Given that heavy naphtha is available today at a very small premium to full range naphtha and the naphtha to PX economics seems to be quite positive, the condensate based units are looking at ways to reduce the condensate splitter operations and procuring heavy naphtha instead. In Korea, Samsung Total is reportedly doing the exact thing today, while in Singapore, Jurong Aromatics has taken a shutdown in late December to attend to some quality issues in the OX section as well as to build flexibility to charge heavy naphtha to their unit. Only long term interregional contracted supplies are arriving in Asia as the falling prices have made it impossible to establish an arbitrage level enough to trade at. Forecast In our last report, we mentioned the risk of seeing crude prices at $45 per bbl levels and that fear has already come true. The Energy team at IHS believes that the global market continues to have excess supplies and that will keep the direction of crude prices lower over the next few months. Crude oil producers will have to lower production to enable prices to stabilize and move back up. This will have to happen due to economic reasons as against the proactive management by OPEC in the past. IHS is in the process of updating our oil sector forecasts, and while details are being worked out we are now looking at a broad low level of $40 per barrel for crude oil, somewhere in Q2 2015 and recovery from that level is expected to be gradual. Our PX price forecasts follow the same trend as our energy forecasts and while we expect spot prices to be stable to slightly higher in February time frame, based on the new crude oil forecast we estimate that PX price will drop below the $700 per mt level in Q2 2015. Despite the fall in prices, PX spreads over naphtha have remained strong at the $350 per mt level and we do not expect it to be drastically lower in 2015. An improvement in the condensate based economics and transalkylation economics will have a negative impact on the naphtha–PX spread, however the falling crude oil prices does not bode well for these processes. History has taught us that as crude oil prices fall; the availability of feedstock for the Aromatics unit becomes expensive and restricted, thereby giving the Aromatics unit a high return, at least on paper. On the demand front, we are increasing our expectations for 2015. The low prices will stimulate demand and if crude prices bounce back in 2015 as expected then there will be a buildup in the textile pipeline inventory which would further boost PX demand.
Benzene capacity loss in January increased by 27,000 mt from December to 211,000 mt, or 8% of total Asian capacity. Chinese capacity loss was large at 69,000 mt, or 33% of January capacity loss in Asia. Jinling PC and Lidong Chemical have suspended their TA plants. Liaoyang PC has continued to idle its old aromatics plants. Sichuan PC is having a scheduled entire complex turnaround, affecting its refinery, aromatics, and naphtha cracker. In Singapore, JAC has suspended its entire complex since mid-December to fix an operational problem and for feed diversification. Other outages are constantly suspended plants like HDA and TDP plants in South Korea and Japan. As a whole, the Asian benzene market has been amply supplied with relatively limited capacity loss due to turnarounds and increased benzene capacity in line with new large-scale PX capacity in South Korea, China, Singapore, and India. On top of this, naphtha crackers have been charging more naphtha in place of LPG seasonally in the turnaround off-season. On the other hand, benzene demand for SM has been picking up after the restart of FCFC’s two lines, Ellba in Singapore, and Chandra Asri’s large plant. In China, one new PH plant in Shanghai has started operation and two other PH plants will start soon. Even though benzene demand has been recovering, benzene production in Asia has been very high. February benzene capacity loss is predicted to fall to 157,000 mt, or 6% of total Asian capacity. The turnaround off-season will continue in February and there will be no scheduled turnarounds. In Singapore, JAC will complete an outage. Other capacity loss will result from constantly suspended plants. In China, Liaoyang PC will again suspend old aromatics plants. Lidong Chemical and Junling PC will suspend their TA plants again in February. In Japan, JX Nippon will idle a TDP plant in Chita, a TA plant in Sendai, and an HDA plant in Mizushima. In South Korea, all HDA plants will continue to be idled. In Taiwan, CPC will continue to suspend two TDP plants. In addition, no naphtha cracker turnarounds are planned and the charging of LPG to crackers will remain seasonally low. Pygas-based benzene production will be in full swing. Benzene supply will remain robust in February. In terms of demand, SM production will be recovering due to the improved margin. SM producers will be preparing for heavy spring turnarounds. Regarding PH, three new PH plants in China might operate and contribute to increased benzene demand. Overall, Asian benzene will be amply supplied in February. As a result, benzene export demand from the United States will remain crucial for Asian benzene players. The Chinese market will also be important for benzene players as an export destination. The February Asian benzene price is expected to decline to $584 per mt in line with a soft US price forecast. The US benzene market will be in steep contango toward gasoline season and economical benzene shipment from Asia to the United States might be plausible. In February, the Asian naphtha price is predicted to recover from January. As a result, the Asian benzene price spread over naphtha is expected to decline.
Av
ailab
ilit
y
Av
ailab
ilit
y
Source: HIS, ICIS and PRISM
2014 Year in Review Performance 2015 Outlook
Summary: Y2014 vs Y2015
Business Y2014 Y2015
(Forecast)
Reason
Gas Price Henry Hub
4.26 $/MMBTU
Lower
• Growth of shale gas
Oil Price Dubai Price
96 $/BBL
Range 50-60 $/BBL
• Still have supply overwhelming in Y 2015
Refinery Margin Singapore GRM
5.8 $/BBL
6-7 $/BBL
• lower price for feedstock and stock gain
Petrochemical - Olefin (HDPE, PP)
- Aromatics (PX, BZ)
HDPE-Naphtha = 695$/TON
PP –Naphtha = 688 $/Ton
PX-Naphtha = 351 $/Ton BZ-Naphtha = 363 $/Ton
HDPE-Naphtha = Stable PP –Naphtha = lower
PX-Naphtha = better BZ-Naphtha = lower
• Positive boost on US economy and stable economic growth in China amid ample supply and new plants start up
2014 Year in Review Performance 2015 Outlook
41
2014
• US shale oil revolution & weaken global economy are reshaping new world's oil price equilibrium
• Sharp oil price fall in Q'4 has dented PTT’s excellent first 3Q's performance
• Gas separation plant performed well, mainly due to sustained high Olefins price and low feed gas cost
• Unlike Olefins, Aromatics spreads (PX & BZ) continued under pressure
• Steep oil price decline has triggered historical high stock losses for refineries and impairment on
upstream investment
• Nonetheless, oil price decline couple with appointed government have made possible energy (price)
reform in Thailand
2015 Outlook
• Oil supply & demand rebalance expected in 2H15
• Low oil price allows for reasonable investment, esp. in the upstream
• Oil price expected to close around $60-65/BBL by year-end, implying stock gain for marketers & refiners
• Current low crude cost means high refinery margin (GRM), esp. due to low crude premium & low
refineries' Fuel & Loss
• Pipeline separation & TPA not expected to have a near-term effect
• PTT to begin to recover from subsidies of the past years on LPG and NGV
• Asset rationalization, e.g., BCP divestment and IPOs of SPRC, will bring in cash
End of PTT Pipeline Court Resolution “16 Feb’15, The Supreme Administrative Court rejected a petition by consumer advocacy groups
asking the court to demand national oil and gas conglomerate PTT Plc return all gas pipelines to the state. The Supreme Administrative Court firm PTT fully comply with the 2007 ruling by the Supreme Administrative Court to return to the state all assets acquired when the company was still a state enterprise.”
Key Takeaways
42
2014 Year in Review Performance 2015 Outlook
42
Thank you PTT Public Company Limited – Investor Relations Department
Tel. +66 2 537-3518, Fax. +66 2 537-3948, E-mail: [email protected] Website: http://www.pttplc.com
Disclaimer
The information contained in our presentation is intended solely for your personal reference only. In addition, such information contains projections and forward-looking
statements that reflect our current views with respect to future events and financial performance. These views are based on assumptions subject to various risks and
uncertainties. No assurance is given that future events will occur, that projections will be achieved, or that our assumptions are correct. Actual results may differ
materially from those projected.
Petroleum Reserves and Resources Information
In this presentation, the Company discloses petroleum reserves and resources that are not included in the Securities Exchange and Commission of Thailand (SEC) Annual
Registration Statement Form 56-1 under “Supplemental Information on Petroleum Exploration and Production Activities”. The reserves and resources data contained in
this presentation reflects the Company’s best estimates of its reserves and resources. While the Company periodically obtains an independent audit of a portion of its
proved reserves, no independent qualified reserves evaluator or auditor was involved in the preparation of reserves and resources data disclosed in this presentation.
Unless stated otherwise, reserves and resources are stated at the Company’s gross basis. This presentation may contain the terms “proved reserves”, “probable reserves”,
and/or “contingent resources”. Unless stated otherwise, the Company adopts similar description as defined by the Society of Petroleum Engineers.
Proved Reserves - Proved reserves are defined as those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable
certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government
regulations.
Probable Reserves - Probable reserves are defined as those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be
recoverable.
Contingent Resources – Contingent resources are defined as those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from
known accumulations, but which are not currently considered to be commercially recoverable. The reasons for non commerciality could be economic including market
availability, political, environmental, or technological.
43
Debt Profile : Control Cost & Manage Risk
Debt Portfolio
Managed debt according to financial risk and policy
Consolidated PTT Only Unit : MMTHB
: Cost of debts ~ 4.57 % : % fixed-rate ~ 77.35 % : Avg. debt life ~ 8.25 years
: Cost of debts ~ 4.41 % : % fixed-rate ~ 74.99 % : Avg. debt life ~ 7.69 years
188,102 181,399 185,924 221,201 208,298 219,332
100,069 125,972 103,024
215,507 259,665 230,390 288,171
307,371 288,948
436,708 467,963
449,722
31 Dec 12 31 Dec 13 31 Dec 14 31 Dec 12 31 Dec 13 31 Dec 14
USD THB
(35%)
(65%)
(41%)
(59%)
(36%)
(64%)
(49%)
(51%)
(55%)
(45%)
(51%)
(48%)
Note : Data as of 31 Dec 14 (THB/USD = 33.1132 THB/JPY = 0.276511) Excluding liabilities from finance leases; Cost of debts includes withholding tax.
44
47
PTT Group Performance : Q4/14 (QoQ)
% share
Unit : MMTHB Q3/14 Q4/14 QoQ Q3/14 Q4/14 QoQ
PTT Net operating Income 12,209 2,237 -82% 12,209 2,237 -82%
E&P - PTTEP 15,284 -24,415 -260% 65.29% 7,846 -16,117 -305%
- PTTGC 7,590 -4,935 -165% 48.89% 3,907 -2,266 -158%
- HMC/PPCL/PTTPL/PTTPM/PTTAC/ PTTES/
PTTME/PTTMCC/PMMA1,067 1,283 20% 40-50% 494 536 9%
Petrochemical 8,657 -3,652 -142% 4,401 -1,730 -139%
- TOP -2,175 -6,479 -198% 49.10% -1,078 -3,206 -197%
- IRPC 22 -5,779 -26368% 38.51% 43 -2,210 -5240%
- SPRC -213 -6,100 -2764% 36.00% -1 -2,012 -201100%
- BCP 381 -2,489 -753% 27.22% 90 -685 -861%
Refining -1,985 -20,847 -950% -946 -8,113 -758%
Inter - PTTER, PTTGE -894 -3,315 -271% 100% -962 -3,323 -245%
Gas -PTTNGD/ TTM(T)/ TTM (M)/ PTTLNG 1,393 786 -44% 50-100% 1,014 605 -40%
Utilities -GPSC/ TP/ DCAP/ CHPP/ BIP/ BIC/ NNEG 1,040 396 -62% 20-30% 307 116 -62%
Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/Others 789 -214 -127% 33-100% 689 -324 -147%
Others Business 2,328 -2,347 -201% 1,048 -2,926 -379%
Shared of Net Income from Affiliates 24,284 -51,261 -311% 12,349 -28,886 -334%
PTT Conso. Net Income 36,493 -49,024 -234% 24,558 -26,649 -209%
Performance 100% Equity Method % PTT
45
48
46
Free Cash flow
60,071 64,074
Financing -43,712 -69,983
Repayment Loans -56,252 -27,963
Interest paid -13,472 -12,801
Dividend paid -37,116 -39,985
Received from share issue - -
Received from loans/Bonds 63,128 10,766
Investing
2013 17,080
2014 -19,430
CAPEX (PP&E, Intangible asset) -22,912 -31,639
Investment (Sub. &Affiliates) -4,281 -3,905
Dividend/Interest Received 37,880 32,969
Others 6,393 -16,855
Operating
2013 42,991
2014 83,504
Net Income 63,276 44,256
Changes in assets & liabilities -12,069 17,966
Income Tax -2,276 -2,553
Non-Cash Adjustment -14,094 15,834
Interest - net 8,154 8,001
Ending Cash & Cash Equivalents
63,927 58,018
Beginning Cash and Cash Equivalents
47,641 63,927
Cash In/(Out)
16,286 -5,909
Adjustment
-73 -
49
Statements of Cash Flows (PTT Only)
Subsidiaries Consolidate PTT (Cambodia) Co., Ltd. PTTCL 100.00% Subic Bay Energy Co., Ltd. SBECL 100.00% PTT Retail Business Co., Ltd. PTTRB 100.00% Thai Lube Blending Co., Ltd. TLBC* 48.95% PTT Tank Terminal Co., Ltd. PTTTANK 100.00% PTT Oil Myanmar Co., Ltd. PTTOM 100.00% Associates Equity Keloil-PTT LPG Sdn. Bhd. KPL 40.00% Thai Petroleum Pipeline Co., Ltd.THAPPLINE 40.40% PetroAsia (Thailand) Co., Ltd. PA(Thailand) 35.00% Others Cost PetroAsia (Maoming) Co., Ltd. PA(Maoming) 20.00% PetroAsia (Sanshui) Co., Ltd. PA(Sanshui) 25.00% Intoplane Services Co., Ltd. IPS 16.67% Fuel Pipeline Transportation Co., Ltd.FPT 0.00024% Others Fair Value Bangkok Aviation Fuel Services Plc. BAFS 7.06%
Others
Subsidiaries Consolidate PTT Exploration & Production Plc. PTTEP 65.29% PTT Natural Gas Distribution Co., Ltd. PTTNGD 58.00% PTT LNG Co., Ltd. PTTLNG 100.00% Joint Ventures Proportionate Trans Thai-Malaysia (Thailand) Co., Ltd. TTM (T) 50.00% Trans Thai-Malaysia (Malaysia) Sdn. Bhd. TTM (M) 50.00% District Cooling System and Power Plant DCAP 35.00% Associates Equity Thai Oil Power Co., Ltd. TP 26.00% Global Power Synergy Co., Ltd GPSC 30.10%
Petrochemical Subsidiaries Consolidate PTT Polymer Marketing Co., Ltd. PTTPM 50.00% PTT Polymer Logistics Co., Ltd. PTTPL 100.00% PTT PMMA Co., Ltd. PTTPMMA 100.00% Associates Equity PTT Global Chemical Plc. PTTGC 48.89% PTT Maintenance and Engineering PTTME 40.00% PTT Energy Solutions Co., Ltd. PTTES 40.00% Joint Ventures Proportionate HMC Polymers Co., Ltd. HMC 41.44% PTT Asahi Chemical Co., Ltd. PTTAC 48.50% PTT MCC Biochem Co., Ltd. PTTMCC 50.00% Refining Associates Equity Thai Oil Plc. TOP 49.10% IRPC Plc. IRPC 38.51% Star Petroleum Refining Co., Ltd. SPRC 36.00% Bangchak Petroleum Plc. BCP 27.22% Others Fair Value Dhipaya Insurance Plc. TIP 13.33%
Subsidiaries Consolidate Energy Complex Co., Ltd. EnCo 50.00% Business Service Alliance Co., Ltd. BSA * 25.00% PTT Regional Treasury Center Pte. Ltd. PTTRTC 100.00%
International Trading Business Group
Subsidiaries Consolidate PTT International Trading Pte. PTTT 100.00%
Remark : * Subsidiaries that PTT holds less than 50% but being consolidated because PTT has the power to control the financial and operating policies.
Petrochemicals & Refining Business Group
Associates Equity PTT ICT Solutions Co., Ltd. PTTICT 20.00%
E&P and Gas Business Group Oil Business Group
Data as of 31 December 2014
International Investment
Subsidiaries Consolidate PTT Energy Resources Co., Ltd. PTTER 100.00%
PTT Green Energy Pte. Ltd PTTGE 100.00%
50
47
51
Natural Gas Price Structure : Jan-Dec 2014
Customers1 Sales Price Structure
Gas Pool Price Supply Margins Pipeline Tariffs + +
Power Producers 59%
: EGAT 27%
: IPP 17%
: SPP 15%
Average Purchased Gas Price
1.75%
1.75%
9.33%
21.9 Bt/MMBtu
GSP 20% Charged at the same price structure of power producers
Petrochemicals Feedstocks
Reference to Saudi Aramco’s contract price
Industry 14% Charged at prices comparable to fuel oil
Gas prices are mostly agreed under long-term contracts and volatility pass-through to ensure stable returns.
NGV 7% Capped at 12.5 Baht/Kg from Dec 2014
Ethane, Propane, LPG Profit-sharing mechanism based on market prices of petrochemicals
NGL Reference to Naphtha market price
Local Cooking Gas
Export Cooking Gas
Capped at 333 USD/ton
• Contract periods are ~ 25-30 years or until depletion of gas fields or the expiration of concessions
1 As at Jan, 2015 48
Natural Gas : Strong and Increasing Demand over Long Term Natural gas is a fuel of choice for power producers and transportation industry
49 Source : PTT
49
Thailand’s Projected Energy Demand
50
Primary Energy Consumption
Source : EPPO/ PDP 2010 Revised 3 (June 2012)/ PTT analysis as of 04 Nov 2014
0
500
1000
1500
2000
2500
3000
3500
4000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
32%
38%
15%
13%
Oil
Natural Gas
Coal/Lignite
Hydro/Import
KBD
Renewable
2%
2,307
1,917
32%
40%
14%
12% 2%
28%
39%
18%
3% 12%
3,281
27%
35%
22%
3%
13%
2,841 Nuclear
26%
32%
25%
4%
12%
1%
3,701
Gas Business Generates Stable Returns
Sole owner and operator of entire
gas transmission pipelines in
Thailand (3,678 km), a regulated
business
• IRROE ranges between
12.5% - 18% for transmission
pipeline investment
Supply & marketing of natural gas
provides fixed margin with long-term
contracts of 25-30 years
6 Gas Separation Plants; Total
production 6.7 MTA; are on
petrochemical market price-linked
profit sharing basis
2014 Year in Review Gas transmission pipeline capacity
Phu Hom
Nam Phong
Thailand
Ban I Tong
Ratchaburi
Nakhon Sawan
SBK
NBK
The Luang
Nakhon Ratchasima
Kaong Khoi
Samut Prakan
ESB
Bang Pakong
Khanom
Songkhla
Sadao
Yadana
Yetagun
Chon Buri
Rayong
Wang Noi
Thai-Malaysia
(JDA)
Arthit
Arthit–FPSO Erawan
Pailin Bongkot
South Bongkot
Chevron–Additional
Platong
Tantawan
Benchamas
Natural gas fields
Power plants Gas separation plant
1,2,3,5,6 in Rayong
Gas separation unit 4
in Nakhon Si Thammarat
Existing pipeline
Future pipeline
Andaman Sea
51
51