Thai PTTEP to Cut 2020 Capex by 15-20%

Thai state-run PTTEP will reduce its 2020 capital expenditure by 15-20% from $4.61bn due to low oil prices but will still invest in projects in Mozambique and Malaysia, it said on April 30 in a statement.

“The major spending cuts are from deferral of some exploration activities and reduction in non-operation related expenses while keeping maintenance capital expenditure to ensure continuity of the energy supply of the country,” CEO Phongsthorn Thavisin said. “The company will continue on the investment in development projects such as Mozambique Area 1 project, and additional drilling activity in Malaysia, Lang Lebah gas field in Block Sarawak SK410B, to ensure the first production of these projects in the next 3-4 years as planned.”

Phongsthorn said that the outbreak of coronavirus (Covid-19) has suppressed the domestic energy demand. As a result, PTTEP has revised the estimated sales volume in 2020 to 362,000 barrels of oil equivalent/day, down 7% from the previous target.

Meanwhile, the company reported a net income of $275mn for the first quarter of 2020, down 30% yr/yr owing to lower realised oil and gas price. The average selling price dropped to $44.81/boe as against $46.2/boe in the same quarter of last year, the company said.