Post on 16-Apr-2022
1
May 14, 2008
Q1/2008 ResultsAnalyst Presentation
Thai Oil Public Company Limited
2
DisclaimerDisclaimer
The information contained in this presentation
is intended solely for your personal reference.
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.
3
Corporate Vision, Mission & ValueCorporate Vision, Mission & Value
TOP seeks to be one of the leading fully integrated
refining and petrochemical companies in the region
recognized for our sustainable growth, optimum
stakeholder value, and commitment to
environmental and social well-being.
VISION• To be PTT’s flagship refinery through optimized
management of the group’s refining portfolio
• To expand facilities to better meet domestic demand growth
• To enhance the competitive advantage of our power generation operations to further solidify the core refining business
• To create a high-performance organization that promotes teamwork, innovation and trust
MISSION
P = ProfessionalismO = Ownership & CommitmentS = Social ResponsibilityI = IntegrityT = Teamwork and CollaborationI = InitiativeV = Vision FocusE = Excellent Striving
CORPORATE VALUE
4
Presentation OutlinePresentation Outline
Business Outlook
Progress of Investment Projects
Market Conditions & Financial Performance
Q1/2008 Key Highlights
5
Q1/08 Key HighlightsQ1/08 Key Highlights
• TOP operated at optimum levels with refinery intake of 276 kbd, bringing
integrated intake to 288 kbd. On the back drop of high product spreads,
TOP run at 285 kbd in March 2008.
• Successful completion of TPX expansion project. Total aromatics complex
capacity increases from 420 to 900 KMTA as from May 2008.
• Construction of MCE project (Sugarcane based Ethanol) progressed as
plan (>50%). Expected COD by end 2008.
• GRM registered at 6.8 US$/bbl, reflecting rising crude price as well as temporarily high VLCC freight during Dec 07 – Jan 08.
• Benefits of strong middle distillate products can be fully capitalized in Q2.
• Integrated Margin registered at $ 7.3 US$/bbl. Due to TPX shutdown for expansion tie-in from 14 Jan, the group reported a net profit of Bt. 3.8 bln.
• 2007 dividend payment of Baht 4.50/share was made, equivalent to 48% of payout ratio
Overall
Operation& Business
Finance
6
Financial Highlights Financial Highlights Consolidated EBITDA
Consolidated Net Profit
(Unit: MB)
(Unit: MB)
5,8058,372
6,043
Q1/07 Q4/07 Q1/08
Q1/07 Q4/07 Q1/08
Q1/07 Q4/07 Q1/08
3,874
5,9434,621
Q1/07 Q4/07 Q1/08
83%
4% 5%8%
92%
2%3%3%
5,943 MB 4,621 MB 3,874 MB
64%
8%5%
23%
8,372 MB 6,043 MB 5,805 MB
Δ YoY
Δ QoQ -4%
-31%
Δ YoY
Δ QoQ -16%
-35%
Q1/08
Q1/08
80%
5% 9%6%
86%
4% 8%2%
65%
9%8%
18%
7
Presentation OutlinePresentation Outline
Business Outlook
Progress of Investment Projects
Market Conditions & Financial Performance
Q1/2008 Key Highlights
8
30
60
90
120
150
03-Jan-07 14-Feb-07 30- M ar -07 15- M ay-07 27-Jun-07 08-Aug-07 20-Sep-07 01-Nov-07 14-Dec-07 01-Feb-08 18- M ar -08 30-Apr -08
Oil Product/Crude Prices & SpreadsOil Product/Crude Prices & SpreadsOil Product & Crude Prices
Product - Dubai Spreads
-25
-15
-5
5
15
25
35
Q1/07 Q2 Q3 Q4
Jet
GO
ULG95Dubai
HSFO
Dubai(US$/bbl)
55.4 64.8 70.1 83.2 91.4
14.6 16.5 16.4 19.4 23.0Jet-DB
GO-DB
ULG95-DB
HSFO-DB
GO-DB
68.4• High crude prices supported by
– Low crude stock in early-Q1
– Capital inflows into commodity to hedge against USD weakness
• Refineries cut run in early-Q1 due to high freight cost/negative hydro skimming margins
• Robust demand in developing countries due to subsidized retail price
• Strong Chinese GO imports amid lower domestic supply as a result of capped retail price
• Middle distillate inventory in mid-Q1 and late winter pushed distillate spread to record high
• High absolute FO price encouraged to move away to cheaper coal and NG for power generation, pressuring FO crack to record low
(US$/bbl)
Q1/08
Q1/07 Q2 Q3 Q4 Q1/08
16.7
9
Oil Demand for Q1/2008Oil Demand for Q1/2008
738 724 704 730 740 724 733
110 120 104 140 160 117 117
87%89%91%
77%
91%91%86%
0
200
400
600
800
1,000
1,200
1,400
Q1/07 Q2 Q3 Q4 Q1/08 FY/06 FY/07
0%
20%
40%
60%
80%
100%
Domestic Demand/Sales Net Export
Petrochem & Others Utilization Rate
Domestic Oil Demand / Refinery Intake
103126
77
316
102
128
84
323
73
118124
12591
338
65
Domestic Oil Demand
Source: DOEB, Ministry of Energy.
(KBD) (KBD)
TOP’s Domestic & Export Sales
LPG Jet/Kero Diesel FOGasoline
82% 88%78%
18% 12% 22%
FY/06 FY/07 Q1/08
Export
Domestic
FY/06
FY/07
44%
13%
9%
9%
16%
DomesticJobbers
Q1/2008
Sales
Breakdown
6%
Export = 22%
4%
Q1/08
Q1/08
Q1/08
10
Q1/08
2.06
7.31
11.36
Jan'08 Feb'08 Mar'08
0
2
4
6
Jan-07 Apr-07 Jul -07 O ct-07 Jan-08
0
80
160
240
320
Gross Refinery MarginsGross Refinery MarginsTOP’s Crude Mix & Oil Product Yield
18% 16%
10% 9% 10%
42%37%
45%
19% 25% 12%
22% 23%17%
7% 6%16%
82% 83%
1%0%LPG
ULG
Jet
Diesel
FO
F/E
Local
M/E
2007 Thailand’sOil Demand
M/E Freight RateFreight
(US$/bbl)Freight
(World Scale)
TOP’s Accounting GRM (US$/bbl)
8.2810.56
6.00
11.67
6.76
4.84
8.97
Q1/07 Q2 Q3 Q4 Q1/08 FY06 FY07
Market GRM Stock Gain/(Loss)
Q1/08
Q1/07 Q2 Q3 Q4 Q1/08
Q1/08 GRM (US$/bbl)
-14.4
18.5
16.7
-14.4
14.5
-17.4
22.8
23.0
-17.8
13.7
(US$/bbl) (US$/bbl)Product-DB Spreads
11
PX and LB MarginsPX and LB MarginsPX, MX and ULG 95 Spot Prices / Margins
500 SN & HSFO Spot Prices / Margins
400
600
800
1,000
1,200
1,400
ม.ค.-07 เม.ย.-07 ก.ค.-07 ต.ค.-07 ม.ค.-08
0
200
400
600
800
1,000
1,200
ม.ค.-07 เม.ย.-07 ก.ค.-07 ต.ค.-07 ม.ค.-08
(US$/Ton)
(US$/Ton)
PX
MX
ULG95
500SN
HSFO
PX-ULG 95
500SN-HSFO
542 473 395 268
637 538 466 380
257
434
420 • The SABIC MEG was back to operation in late Q1, relieving feedstock cost for polyester and hence resuming downstream operation and adding more demand
• Margin is still poor due to high feedstock cost and high MX supply from TPX
• 500 SN - HSFO spread in Q1/08 gradually spiked up as a result of:
– Tight supply availability of lube base as refiners maximized gasoil production
Q1/07 Q2 Q3 Q4 Q1/08
BZ
TL
Q1/07 Q2 Q3 Q4 Q1/08
505
12
542 473395 268
420257
Q1/07 Q2 Q3 Q4 Q1/08 FY07
Integrated MarginsIntegrated Margins
8.9711.67
6.00
10.568.28
6.76
Q1/07 Q2 Q3 Q4 Q1/08 FY07
Crude
PX - ULG 95
GRM
LB - HSFO
(US$/Ton)
(US$/bbl)
(US$/Ton)
1.85
1.40
1.28
1.251.15
0.87
0.71
0.86
0.30
0.10
0.52
0.64
7.28
10.8012.32
7.67
11.3410.52
Q1/07 Q2 Q3 Q4 Q1/08 FY07
• TOP Group’s integrated margin decreased to
7.28 US$/bbl (-33% YoY or -36% QoQ),
mainly affected by higher VLCC freight cost
by 2 US$/bbl in Jan-Feb
1) calculated from integrated intake
434
637 538466 380
505
Q1/07 Q2 Q3 Q4 Q1/08 FY07
Q1/08
Q1/08
Q1/08
Q1/08
Integrated Margin 1) (US$/bbl)MX S/D
PX S/D
13
106 9990
99 94 9171 74
87100
70
95100
57
100 9886
95
Q1/07
Q4/07
Q1/08
Ship Utilization
Plant Utilization
Plant Availability
Lube Base Production
PX Production
RefineryUtilization
Q4/07
Q1/08
Q1/07
11.7
6.8
8.3
PX-ULG95GRM 500SN-HSFO
268
257
542
380
434
637
Q1/2008 Net Profit Breakdown
-450%-33%-1%-71%-77%-16%Δ YoY
-40%+51%+54%+44%+153%*-25%Δ QoQ
(14)533351403143,210Net Profit
*
* Only MX Production
* Increase MX sales volume following MX expansion completed since Dec 2007
1,370
314
3,8264,261
3,210
124
490
140
97
257
210
139
Q1/07 Q4/07 Q1/08
IPT/TP/TM
TLB
TPX
TOP
5,943
3,8744,621
PerformancePerformance BreakdownBreakdown byby CompanyCompany
14
7.28
6.76
Q1/08
11.678.28TOP’s GRM
11.3410.80Integrated Margin
Q1/07 Q4/07(US$/bbl)
664
3,210
3,874
(1,154)
1,122
(389)
5,805
96,314
(MB)
4,2613,826TOP
2,117
5,943
(1,530)
854
(471)
8,372
64,428
360Subsidiaries
(342)Financial Charges
4,621Net Profit
(1,482)Tax Expense
339FX G/L & CCS
6,043EBITDA
61,241Sales Revenue
23%
31.62
1.90
20%
35.14
2.91
33.89THB/US$ - ending
25%Effective Tax Rate (%)
2.26EPS (THB/Share)
* Restated P&L regarding to the change of accounting policy
-36%
-42%
% QoQ
-33%
-18%
% YoY
+84%
-25%
-16%
-22%
+231%
+14%
-4%
+57%
-69%
-16%
-35%
-25%
+31%
-17%
-31%
+49%
-8%
-7%
-16%
+15%
-10%
-35%
Consolidated Financial PerformanceConsolidated Financial Performance*
15
Solid Financial PositionSolid Financial Position
76,25771,83760,166
41,81532,891
19,706
30,33631,842
30,452
(Unit: MB)
CurrentAssets
Non-CurrentAssets
Other Liabilities
LT Debt136,570
110,324
148,409
FY/06 FY/07
Equities
1.0 0.9 0.9
0.40.4 0.3
FY/06 FY/07 Q1/08
Net Debt / EBITDA
Net Debt / Equity
Treasury
Policy
Bt. 30,336 mn.(US$ 959 mn.)
70%
18%
11%
1%
Currencies
As of 31 March 2008(31.62 THB/US$)
Interest Rate
US$51%
THB49%
*Figures shown are unauditted from the company’s Certified Public Accountants
Net Debt / EBITDA ≤ 2.0x
Net Debt / Equity ≤ 1.0x
Balance Sheet
Financial Ratios
Floated42%
Fixed58%
Q1/08
Q1/08
THB Loan 30%
US$ Loan15%
THB Bond 19%
US$ Bond 36%
Q1/08
Consolidated Long-Term Debt
16
Presentation OutlinePresentation Outline
Business Outlook
Progress of Investment Projects
Market Conditions & Financial Performance
Q1/2008 Key Highlights
17
TPX Expansion ProjectTPX Expansion Project
TPX Process (after Expansion)
BTX : +480 KTA Aromatics
+PX 141 KTA +MX 18 KTA
+BZ 177 KTA +Tol 144 KTA
Cost : US$ 282 mn.
EPC : Bechtel
PMC : Foster Wheeler
Project Details
Total Aromatics 900 KTA
TPX Production
18
Capability Driven StrategyCapability Driven Strategy
COMPETITIVE ADVANTAGE
REPUTATION
EMPLOYEE ENGAGEMENT
Capabilities
• Strong technological, engineering & operational expertise
• Good relationship with municipal & surrounding community
• Ability to produce Euro IV products at low cost prior to others
• Networking within PTT group
Enablers
Strategic Program
AlternativeEnergy
Diversification Strategy
Leading Fully Integrated Refining and Petrochemical Companies in Asia-Pacific
OrganicGrowth
Value ChainEnhancement
M&AInter. Invest.
• Experience in oil business
• Partnership with feedstock & technology suppliers
• Experience in power business (SPP&IPP)
• Knowledge & expertise in refining and petrochemical industry
• Strong balance sheet (low gearing ratio)
• Strategic fit with PTT group aspiration
A B C D E
19
2008 2009 2010 2011 2012 2013 2014 2015
A1 Residue Upgrading COD
A2 PX Capacity Expansion COD
A3 New IPP (735 MW x 2) 2 blocks
A4 New SPP (79 MW) PPA COD
A5 Marine Fleet Expansion Phase II
B1 EURO IV Product Phase I Phase II
B2 Synergy with PTT & Other Refineries
B3 Downstream Aromatics COD
B4 TLB Specialty Products
C1 Municipal Waste Power Plant COD
C2 Ethanol Plant (500 lpd x 3) Phase I Phase II
D1 Thaioil Energy Solutions
D2 MFC Energy Funds
E1 M&A
E2 International Investment
Phase III
Phase I
Phase I
Phase II
ALTERNATIVE ENERGY
DIVERSIFICATION
M&A / INTERNATIONAL INVESTMENT
ORGANIC GROWTH
VALUE CHAIN ENHANCEMENT
Projects Under Development
Road MapRoad Map--Key Strategic Initiative projectsKey Strategic Initiative projects
A
B
C
D
E
20
Residue UpgradingResidue Upgrading•Surplus domestic fuel oil•Higher differential price between distillates vs. fuel oil
Driving Forces
•Add residue upgrading facilities to process heavy residue and allow processing more heavy/sour crudes
Description
4.8 6.5
17.5
23.427.8 27.1
43.4
0
10
20
30
40
50
2002 2003 2004 2005 2006 2007 Jan-Apr'08
$/bbl
0
10
20
30
40
50
60
2002 2003 2004 2005 2006 2007 2008
kbd
Gasoil - HSFO SpreadThailand Fuel Oil Export
21
PX Capacity ExpansionPX Capacity Expansion
Driving Forces
Description
•Surplus domestic Toluene•Higher differential price between Toluene and other Aromatics
•Upgrade Toluene to PX and BZ •Increase total PX capacity by 110 KTA to 600 KTA
0
400
800
1200
2002 2003 2004 2005 2006 2007 2008
US$/Ton
Paraxylene
Benzene
Toluene
Paraxylene - Toluene
PX/BZ/TL Price ComparisonThailand Toluene Demand & Supply
Source: Dewitt company, PTIT, Samsung presentation
0
200
400
600
2007 2008 2009 2010 2011
KTPA
ATC No. 1 ROC IRPCTPX ATC No.2 MOCDemand
22
Presentation OutlinePresentation Outline
Business Outlook
Progress of Investment Projects
Market Conditions & Financial Performance
Q1/2008 Key Highlights
23
Current Crude Oil Forward PriceCurrent Crude Oil Forward Price
30
40
50
60
70
80
90
100
110
120
130 WTI
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Avg 05: 57.18
Avg 07: 72.46
Avg 06: 66.99Month ago
14 May 08
Apr 08: 112.46
Mar 08: 105.16Year ago
May 08: 121.54
24
Relationship - USD and Oil Prices NYMEX - Net Long Position
1 Position = 1,000 bbl
1 Position = 100 Tons
82%85%97%11%-66%
Jan-May’08
Jan-Mar’08200720062005
WTI vs. USD Valuation
78%87%97%26%-75%
Jan-May’08
Jan-Mar’08200720062005
Dubai vs. USD Valuation
KeyKey FactorsFactors SupportSupport HighHigh CrudeCrude OilOil PricesPrices
25
Crude Reserve OutlookCrude Reserve OutlookUS Crude Stock OECD Europe Stock
Japan Crude Stock China Crude Stock
Capacity 19 mbbl
Capacity 19 mbbl
Capacity 73 mbbl
Capacity 15 mbbl
Capacity 31 mbbl
Capacity 33 mbbl
Capacity 73 mbbl
Capacity 44 mbbl
Phase I: 2006-2007
Phase II: 2008-2010
26
1
Impact of Higher Crude Oil PriceImpact of Higher Crude Oil Priceon Product Spreadson Product Spreads
0
250
500
750
1,000
Jan-00Jan-01
Jan-02Jan-03
Jan-04Jan-05
Jan-06Jan-07
Jan-08
CoalCoal
HSFOHSFO
DubaiDubai
Higher Crude Price =>Higher Crude Price =>
Higher Spread FOHigher Spread FO--Crude Prices Crude Prices
Much Higher Spread CoalMuch Higher Spread Coal--FO PricesFO Prices
(US$/Ton)
GOGO
27
Reuters Singapore GRMReuters Singapore GRM
1
-4
-2
0
2
4
6
8
10
12
14REUTERS SINGAPORE GRM
DB Cracking
DB Skimming0.96
5.80
1.79
-0.68
7.81
6.58
6.55
-1.02
6.20
0.95
10.13
0.64
8.43
2.01
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY
6.96
-0.79Hydroskimming MarginHydroskimming Margin
Complex MarginComplex Margin
(US$/bbl)
28
China's Utilization Rates
55%
65%
75%
85%
95%
105%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 2007 2008
TOTAL CDU: 7.8 MBDTOTAL CDU: 7.8 MBD
Japan's Utilization Rates
55%
65%
75%
85%
95%
105%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 2007 2008
TOTAL CDU: 4.5 MBDTOTAL CDU: 4.5 MBD
South Korea's Utilization Rates
55%
65%
75%
85%
95%
105%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 2007 2008
TOTAL CDU: 2.6 MBDTOTAL CDU: 2.6 MBD
Taiwan's Utilization Rates
55%
65%
75%
85%
95%
105%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 2007 2008
TOTAL CDU: 1.3 MBDTOTAL CDU: 1.3 MBD
Singapore's Utilization Rates
55%
65%
75%
85%
95%
105%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2006 2007 2008
TOTAL CDU: 1.3 MBDTOTAL CDU: 1.3 MBD
Refinery Utilization RateRefinery Utilization RateUS Refinery Utilization
TOTAL CDU: 17.2 MBDTOTAL CDU: 17.2 MBD
29
ConsequenceConsequence ofof HighHigh CrudeCrude Oil PricesOil Prices
High Crude Oil Price
Poor Hydroskimming Margin
Lower Refinery Utilization
Higher Middle Distillates Price vs. Crude
Higher Usage of NG & Coal for Power Gen.
Lower FO Demand & Lower FO price vs. Crude
Higher Diff. FO vs. NG & Coal
Lower GO & Jet Production vs. High Demand
30
ConclusionsConclusions
At higher crude oil prices and much higher differential prices of GO/Jet vs. crude oil, TOP shall benefit from high GO/Jet production (>60%) and low FO production (<10%), on top of stock gain.
At higher crude oil prices and much higher differential prices of GO/Jet vs. crude oil, TOP shall benefit from high GO/Jet production (>60%) and low FO production (<10%), on top of stock gain.
With the completion of CDU-3 Revamp and TPX expansion projects, TOP group should be able to capitalize full benefits in 2008.
With the completion of CDU-3 Revamp and TPX expansion projects, TOP group should be able to capitalize full benefits in 2008.
TOP is committed to pursue development of new strategic projects as well as strengthen financial positions in order to cope with dynamic change in the current volatile oil industry.
TOP is committed to pursue development of new strategic projects as well as strengthen financial positions in order to cope with dynamic change in the current volatile oil industry.
31
Q & AQ & A
32
Thank YouThank You
Should you have any queries, please contact:Should you have any queries, please contact:
Investor RelationsInvestor Relations
at email: ir@thaioil.co.that email: ir@thaioil.co.th
Tel: 662Tel: 662--617617--83008300
Fax: 662Fax: 662--299299--01280128
33
APPENDICES
34
RegionalRegional OilOil Demand/SupplyDemand/Supply OutlookOutlookRegional Oil Demand1) Asia-Pacific Refining Capacity Additions
China 6,852 7,175 4.7% 7,593 8,503 9,302 5.2%Japan 4,969 4,819 -3.0% 4,716 4,435 4,214 -2.7%India 2,475 2,624 6.0% 2,747 2,971 3,222 4.5%South Korea 2,237 2,317 3.6% 2,376 2,461 2,504 1.9%Thailand 976 988 1.3% 1,019 1,075 1,143 2.7%Singapore 869 940 8.2% 1,014 1,165 1,331 7.4%Others 5,289 5,465 3.3% 5,671 6,038 6,376 3.2%Total Demand 23,666 24,328 2.8% 25,136 26,648 28,093 2.9%Total Supply 21,755 22,532 3.6% 23,041 24,926 25,936 3.0%
ME Sur/(Def) 3,072 2,873 -6.5% 2,990 3,046 3,562 2.5%
2008F 2010F 2012F% Annual Growth
(2006-12F)Kbd 2006A 2007A % Growth
Total
China 7,626 436 1,246 190 210 700 2,882Japan 4,529 - 32 19 - - 106India 3,055 580 144 215 120 - 1,123Taiwan 1,293 - - - - - 0Thailand 1,092 69 - - - 35 154Vietnam 5 - 121 - - - 121Others 7,264 55 90 - - 160 346
Total 24,864 1,140 1,633 424 330 895 4,732
2011F 2012F2010FKbd07
Existing2008F 2009F
Asia-Pacific Demand/Supply Balance
0
600
1,200
1,800
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
KBD
OthersJapan
IndiaChina
Source: FACTS, Spring 2008
YoY Demand Growth
YoY Capacity Addition
• Regional demand will remain outstrip supply even with several additional refining capacity projects during 2008-9, mainly in China and India.
• Chinese additional capacity is geared toward domestic demand. Indian capacity addition is geared for export to US & EU.
• Several new grassroot refinery projects in M/E (about 840 kbd - mainly in 2010) have been delayed or canceled due to longer delivery time of major equipment and high escalating costs.
35
Middle East: CDU Addition DelayMiddle East: CDU Addition Delay
• FACTS - Spring 2008 revised the forecast refinery capacity in Middle East buildup from 2.7 MBD to 3.0 MBD during 2007 – 2015.
• However, the timing of project completion has changed drastically and pushed back in general.
• Only 0.7 MBD of new CDU was expected to come on stream during 2007- 2010, and most projects are expected to materialize during 2011-2012
35
FACTS: FALL 2007Middle East CDU additions
FACTS: FALL 2007Middle East CDU additions
FACTS: SPRING 2008Middle East CDU additions
FACTS: SPRING 2008Middle East CDU additions
Source: FACTS, Spring 2008
36
PX Business OutlookPX Business OutlookGlobal PX Supply / Demand & Operating Rate
Domestic PX Demand & Supply
Aromatics Highlight :
• Strong demand growth will
continue through 2012
• Impact of large supply addition
will be in 2009
• Post completion of PTTAR
(ATC-2) project, Thailand will
be net export of PX from 2009
onwards
Source: CMAI, 2008 & Company
0
500
1,000
1,500
2,000
2,500
2007 2008 2009 2010 2011
KTPA
ATC No. 1 ESSO TPX ATC No. 2 Demand
37
Lube Base Business OutlookLube Base Business Outlook
Source: Prelim Global Lubricant Basestocks Study, Kline - Apr, 07
• Regional Base Oil demand / supply growth will be more prominent than the global.
• Shortage of Group I/II supply in the region will support strong margin on high viscosity grade.
• Group III surplus would put pressure on low viscosity base oil.
100
200
300
0
Demand Supply
Group I
Group II
Group III
2006 2010 2015
Demand +3.8% CAGR
900
800
700
600
500
400
300
200
100
0
Demand Supply
Group I
Group II
Group III
• Global Base Oil demand is expected
to grow by 2.1% CAGR through 2015.
• Global supply for Group I is expected
to gradually drop and be replaced by Group II and III.
2006 2010 2015
Demand +2.1% CAGR
Thailand Base Oil Demand Growth
Regional Base Oil Demand / Supply
38
0
50
100
150
200
250
300
350
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
2006 2007 2008
mml / month
0
20
40
60
80
100
120
140
mml / month
Household (LHS) Transportation (RHS)
Industry (RHS) Petrochem (RHS)
300
400
500
600
700
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
mmls/mth
2005200620072008
2008 Q1 up 17.6%
up 12.4 % up 9.2 % up 15.0%
Domestic LPG DemandDomestic LPG DemandThailand LPG Demand
LPG Demand by Sector
LPG Demand Highlight
• LPG demand continues rising momentum on the back drop of domestic price cap structure.
• Deferral of partial LPG price lifting supports demand growth of 17.6% in Q1/08.
Outlook 2008
• Despite high energy price, the Government still considers a partial price lifting to avoid shortage of domestic LPG supply.
• Expect LPG demand grow ~ 10% in 2008
Source : Department of Energy Business, Ministry of Energy
39
Thailand Gasoline Consumption By Grade
0
50
100
150
200
250
300
350
400
450
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
2005 2006 2007 2008
mml / month
ULG91 ULG95 Gasohol 91 (E10) Gasohol 95 (E10) Gasohol E20
Thailand Gasoline Consumption By Grade
0
50
100
150
200
250
300
350
400
450
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
JAN
FEB
MA
R
APR
MA
Y
JUN
JUL
AU
G
SEP
OC
T
NO
V
DEC
2005 2006 2007 2008
mml / month
ULG91 ULG95 Gasohol 91 (E10) Gasohol 95 (E10) Gasohol E20
520
550
580
610
640
670
700
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
mmls/mth
2005200620072008
2008 Q1 down 1.9%
down 5.3%down 0.3%
up 1.5%
Domestic Gasoline DemandDomestic Gasoline DemandThailand Gasoline Demand
Gasoline Demand by Type
Gasoline Demand Highlight
• Year 2007 witnessed recovery trend for gasoline, supported by sound economic growth.
• However, demand growth in Q1/08 was pressured by high oil price situation.
Outlook 2008
• Gasohol market would continue to increase at the expense of ULG due to more attractive price.
• Rising E20 car sales also boosts gasohol demand.
• These allow modest growth of base oil gasoline for this year.
• Expected growth of 1-2%.Source : Department of Energy Business, Ministry of Energy
40
0
20,000
40,000
60,000
80,000
100,000
120,000
2003 2004 2005 2006 2007 2008
# of flight per Quarter
0
200
400
600
800
1,000
1,200
1,400
mml per Quarter
# of Flights (lhs)JP 1 Demand (rhs)
200
250
300
350
400
450
500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
mmls/mth
2005200620072008
2008 Q1 up 4.1%
up 0.8%up 6.1%
up 9.1%
Domestic JET DemandDomestic JET DemandThailand JET Demand
JET demand and # of flights
JET Demand Highlight
• Steady demand growth is supported by strong aviation and tourist businesses.
• Q1 demand growth is supported by increase in flight numbers of 7%.
Outlook 2008
• Strong tourist business in the region (especially China) should continue to support Jet demand growth.
• Expect Jet demand grow~ 4-5% in 2008
Source : Department of Energy Business, Ministry of Energy
41
0
400
800
1,200
1,600
2,000
2005 2006 2007 2008
mml / month
HSD B5
Domestic Gasoil DemandDomestic Gasoil DemandThailand Gasoil Demand
B5 Sales
Gasoil Demand Highlight
• A slight upward momentum was seen in gas oil due to economic growth.
• Soaring oil prices resulted in a stagnant demand for Q1/08
Outlook 2008
• Despite high oil prices, the Government’s economic stimulation should allow gas oil demand to recover with a slight growth of 0-1% in 2008.
1,200
1,400
1,600
1,800
2,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
mmls/mth
2005200620072008
2008 Q1 down 0.3%
down 0.6%down 6.0%
up 2.2%
Source : Department of Energy Business, Ministry of Energy
42
0
100
200
300
400
500
600
700
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
mmls/mth
2005200620072008
2008 Q1 down 10.5%
down 2.3% down 5.7%down 27.9%
Thailand Fuel Oil Demand Fuel Oil Demand Highlight • Fuel oil demand continue its decline
momentum due to NG replacement.
• NG supply disruption (Artit & Yetagun) in Q1/08, resulted in short term FO demand in March 2008
• Q1 demand still dropped by only 10.5% vs 27.9% last year.
Outlook 2008• Expect fuel oil demand drop ~ 10%
Source : Department of Energy Business, Ministry of Energy
2,500
2,700
2,900
3,100
3,300
3,500
3,700
3,900
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
mml / month
2005200620072008
Down 1.9%Down 0.6%
Up 0.3%
2008 Q1 down 10.5%
Total Petroleum Demand Total Petroleum Demand Highlight
• Q1/08 product demand grew by 1%, due mainly to LPG and Jet fuel.
• Local economic growth would support consumption while high prices would be a wild card to pressure growth.
Outlook 2008
• Expect Total demand grow ~ 1.0%
Domestic Fuel Oil & Total DemandDomestic Fuel Oil & Total Demand