PETROLEUM BUSINESS OUTLOOK
Bangchak : Upgrades may lift sales 20-25%
Bangchak Petroleum expects its earnings to rise by 20% to 25% this year as the company increases output following an upgrading programme. Earnings before interest, tax, depreciation and amortisation are expected to increase from 40 billion baht in 2007 after its refinery improvements go online in March. Bangchak reported nine-month net profits of 1.34 billion baht on revenues of 67.63 billion.
President Anusorn Sangnimnuan said refinery operations would be shut down for 40 days from Jan 25 to March 1 to install a new production quality improvement (PQI) unit.
The installation will help Bangchak increase output by 43% to 100,000 barrels per day from 70,000. Production of higher-margin gasoline, diesel and jet fuel will also increase to 85% of total output from 60% once the improvements are complete.
For the first quarter, crude oil processing will drop to around 52,000 barrels per day from 70,000. Once the upgraded units are operating, refining margins will increase to around $7 per barrel from $3 now.
Yesterday Bangchak also formally launched its new E20 gasohol blend at six stations in Bangkok.
E20, a 20% blend of ethanol and 80% petrol, is currently selling for six baht per litre cheaper than premium petrol. A number of manufacturers, including Ford, Honda, Mazda, Mitsubishi, Toyota and Volvo, have already announced the launch of new car models with engines modified to use the fuel.
Mr Anusorn said average retail petrol prices this year were likely to be around 32 to 34 baht per litre, with diesel priced at 29 to 32 baht.
Crude oil prices in Dubai were likely to average $90 to $100 per barrel.
Energy Minister Piyasvasti Amranand said ethanol and biodiesel usage this year would increase to the equivalent of 14 billion baht from 4.7 billion last year.
The value of the country's oil imports in 2007 fell to 752.77 billion baht from 814.03 billion the previous year, due in part to the stronger baht but also to the increased use of biofuels and natural gas for vehicles.
Dr Piyasvasti said premium gasoline and regular gasoline would be completely replaced within the next four years by E10 and E20 gasohol blends.
Global oil prices last week briefly touched $100 per barrel. Yesterday PTT Plc, the country's largest oil company, announced it was increasing retail petrol prices today by 40 satang per litre, with premium petrol quoted at 33.69 baht per litre and regular petrol at 32.39 baht.
PTT quotes E10 premium gasohol at 29.69 baht per litre, E10 regular gasohol at 28.89 baht and E20 at 28.19 baht. Diesel prices were unchanged at 29.74 baht per litre, with biodiesel quoted at 28.74 baht.
Bangchak (BCP) closed yesterday on the SET at 13.20 baht, down 20 satang, in trade worth 6.96 million baht.