Post on 12-Aug-2020
Thai Oil Public Company Limited
Presentation to Investors
January 2014
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Disclaimer
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.
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VISION A LEADING FULLY INTEGRATED REFINING & PETROCHEMICAL
COMPANY IN ASIA PACIFIC
MISSION
• To be in top quartile on performance and return on investment
• To create a high-performance organization that promotes
teamwork, innovation and trust for sustainability
• To emphasis good Corporate Governance and commit to Corporate
Social Responsibility
VALUES
Corporate Vision, Mission and Values
Professionalism
Ownership & Commitment
Social Responsibility Integrity Teamwork & Collaboration Initiative
Vision Focus
Excellent Striving
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Corporate Governance Policy
Corporate Governance Policy
The board of directors, management
and all staff shall commit to moral
principles, equitable treatment to all
stakeholders and perform their duties for
the company’s interest with dedication,
integrity, and transparency.
Roles and Responsibilities for
Stakeholders
• Truthfully report company’s situation and
future trends to all stakeholders equally
on a timely manner.
• Shall not exploit the confidential
information for the benefit of related
parties or personal gains.
• Shall not disclose any confidential
information to external parties.
CG Channels
Should you discover any
ethical wrongdoing that is
not compliance to CG policies
or any activity that could
harm the Company’s interest,
please inform:
Corporate Management Office Thai Oil Public Company Limited 555/1 Energy Complex Building A
11F, Vibhavadi Rangsit Road,
Chatuchak, Bangkok 10900
cgcoordinate@thaioilgroup.com http://www.thaioilgroup.com
+66-0-2797-2999 ext. 7312-5
+66-0-2797-2973
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Agenda
TOP Group Overview
-7-
Strategic relationship and operational integration with PTT
Benefits from PTT’s dual
role as our major
shareholder and key
business partner
All transactions take place
at arm’s length and in
adherence with strong
corporate governance
principles
Thai Oil’s strong shareholder base
Key strategic
benefits for Thai Oil
49.1%
1. Long-term
strategic partnership
• Thai Oil is PTT’s principal refiner
• Long-term strategic shareholder and joint investment
2. Business
partnership
• Product offtake • Crude procurement
3. Operational
synergies
• Freight costs reduction • Knowledge transfer and
shared services • Close management
collaboration and secondment of trained staff
49.1%
24.7%
26.2%
PTT
Foreign Investors
Local Investors
# of Listed
Shares
2,040 mil.
shares
Free Float
Shares 49.9%
As of 17 Sep 2013
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TOP Group Synergy & Strategic Role in PTT Group Value Chain
NATURAL GAS
CRUDE IMPORT
Solvent
Mixed-Xylene
Toluene
Pentane
Hexane
SOLVENTS
TP provides electricity and steam to
Thai Oil, TLB and TPX and sells its
remaining power to the national grid
Paraxylene
Benzene
Mixed-Xylene
Toluene
AROMATICS
Lube Base Oil
Bitumen
TDAE
Slack Wax
Extract
LUBE BASE
REFINERY LPG
Fuel Oil
Diesel
Gasoline
Jet/Kero
PLATFORMATE
LONG RESIDUE
REFINED
PETROLEUM
POWER
Diversifying to a broad
range of downstream
products to enjoy higher
profit margins and
reduce earnings volatility
Thai Oil’s Businesses
The majority of
refined
petroleum
products are
sold
domestically to
PTT
PTT is our
principal
domestic
customer for
our lube
base
products
Upstream Intermediate Downstream
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2007
• Increased refining capacity to 275 kbd
2008
• The first refinery in Thailand with
diesel production to comply with the
sulfur content requirements of Euro IV
• Capacity expansion of Thai Paraxylene
with total aromatics capacity of 900,000
tons p.a.
• Invested in Solvents business in
Thailand and Vietnam
Key milestones: 52 years, a long track record of success
1993
• We expanded our refining capacity to 190 kbd
1994 – 1997
• Increased total refining capacity to 220 kbd
• Initial investment in Thai Paraxylene (“TPX”) and Thai
Lube Base (“TLB”)
• IPT became the first IPP to enter into a PPA with
EGAT2 with 700 MW capacity ; separately, Thaioil
Power (“TP”) constructed the power generation
plant under the SPP with 118 MW capacity
1961 – 1997 Capacity expansion and initial stage of business
diversification
2004 – 2011 Listing, expansion and diversification
Today A leading integrated refining and petrochemical
group in Asia Pacific
• 275 kbd refinery ( approximately 25%
of Thailand’s total refining capacity)
• Nelson index 9.71
• Diversified business through 13
subsidiaries
• The 3rd largest listed company
by revenue in Thailand
1961 – 1964
2004
1961
• Incorporated
1964
• Commenced
operation with
distillation capacity
of 35 kbd
• Simple refinery with
Nelson complexity
Index ~ 41
1970
• Refining capacity
expanded to 65 kbpd
1989
• Increased refining
capacity to
90 kbpd
2004
• IPO and listed on the SET
• Acquired remaining shares
in Thai Paraxylene and Thai
Lube Base which became
our wholly-owned
subsidiaries
2007 -2008
2010
2011
1993-1997
1970-1989
2012
2012
• Completed PxMax
project
• Revenue 447,432 MB
• Net profit 12,320 MB
2011
• The first refinery in the
Asia-Pacific region to
manufacture diesel
and unleaded gasoline
in compliance with the
sulfur and benzene
aromatics content
requirements of the
Euro IV standard
• Acquired our first VLCC
under a JV agreement
2010
• Established
Thaioil Ethanol
• Production
expansion of
TDAE by 50,000
tons per annum
Note 1. Based on our internal estimates using the methodology of the Nelson Complexity Index 2. The Electricity Generating Authority of Thailand (“EGAT”) is the national grid
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Thai Oil Group Business Structure
9.0%
Principal power plant of
the PTT
capacity 1,038 MW of
electricity and
1,340 tons/hour
of steam
Total aggregate capacity 1,357 MW
Platformate 1.8 million tons/annum
PTT Group 80.0%
100.0% 100.0% 74.0% 100.0%
Thaioil (TOP) Thai Lube Base
(TLB) Thaioil Power
(TP)
Global Power
Synergy Company Limited
Thaioil Energy Services (TES)
Thaioil Marine (TM)
Maesod Clean Energy (MCE)
Capacity : 275,000 barrels/day
Small Power Producer
Program 3-on-1 Combined Cycle Electricity 118 MW Steam 168 tons/hour
Sells Electricity/ Steam to Group
• 5 Oil & Chemical
Tankers
Capacity :147,450 DWT
• Crude Tankers: 2VLCCs
Capacity: 581,550 DWT
• 5 crew & utility boats
(120 DWT each)
• Large vessels for crude,
feedstock & product
storage and
transportation services
• Ship management
services
PTT 26.0%
Proceeds the business on
various professional of
management services
Sugarcane Based Ethanol
Capacity : 230,000 lts/day
PTT 30.1%
Thaioil 11.9%
TP 27.7%
Padaeng 35.0%
Mitr Phol 35.0%
100.0%
Thappline (THAP)
Multi-product Pipeline Capacity:26,000 m.lts/y
20.0%
PTT 31.0% Others 60.0%
Lube Base Oil
Capacity : Base Oil 267,015 tons/annum Bitumen 350,000 tons/annum
TDAE
67,520 tons/annum
Thaioil Solvent
Through TOP Solvent (TS)
100.0%
100.0%
Thaioil Ethanol (TET)
Capacity : 76,000 tons/annum
Thai Paraxylene (TPX)
100.0% 80.5%
Solvent distribute
in Thailand Sak Chaisidhi
(SAKC) Top Solvent
Vietnam
Solvent distribute in
Vietnam
PTT ICT Solutions (PTT ICT)
Sapthip (SAP)
Cassava Based Ethanol
Capacity : 200,000 lts/day
50.0%
Ubon Bio Ethanol (UBE) 21.3%
Cassava/Molasses Based Plant
Capacity : 400,000 lts/day
100%
PTT Energy Solutions (PTTES)
Provides engineering
technique consulting
services
20.0% PTT 40.0%
PTTGC 20.0% IRPC 20.0%
BCP 21.3% Others 57.4%
PTTGC 30.3%
30.0% Aromatics Capacity:
Paraxylene 527,000 tons/annum Mixed Xylene 52,000 tons/annum Benzene 259,000 tons/annum Total 838,000 tons/annum
LABIX Company
Limited (LABIX)
LAB producer and distributor
Capacity: 100 KTA COD: 2015
Mitsui 25.0% 75.0%
TOP SPP Company Limited
2 Small Power Producers
Total capacity: 220 MW
COD 2016
100.0%
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Process Linkage: Beauty of Integration
Thai Paraxylene
Thai Lube Base
PROCESS FLOWCHART
JET
ULG91
LPG
ULG95
KEROSENE
CDU-1
45,000
CDU-2
50,000
CDU-3
165,000
MX
AGO
DIESEL
FUEL OIL
BITUMEN
SULPHUR
HVU-1
HVU-2
HVU-3
95,000
FUELGAS
BBU
1,800
ADIP
TCU
19,000
FCCU
10,400
HCU-
1 HCU 2
50,000
SRU-1/2
SRU-3/4
2x210
KMT-1
KMT-2
HMU-1
HDT-1
HDT-2
HDT-3
85,000
HMU-2
140TH2
HDS-2
HDS-3
75,000
MX
40,000
CCR-1
CCR-2
50,000
ISOM
20,000
ADIP
Thai Oil
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One of Region’s Leading Refineries
Thai Oil (275 kbpd)
PTT’s Principal Refiner
Esso (170 kbpd)
IRPC2 (215 kbpd)
SPRC2 (150 kbpd)
BCP2 (120 kbpd)
Fang (3 kbpd)
Gulf of Thailand
PTTGC2 (145 kbpd)
Remarks:
• Nelson Complexity Index measures refinery’s upgrading capability for comparison
• It is the ratio of complexity barrels divided by crude distillation capacity
14.0 13.8
9.74 9.2
6.6 6.5 4.6
RPL JX TOP PTTGC Esso Sinopec SK Corp
Source: The company and broker research
Nelson Index - Regional Comparison
Note: 1. Source: Energy Policy and Planning Office, Ministry of Energy Thailand,
2. PTT holds a 27.22% interest in BCP, a 38.51% interest in IRPC, a 48.9% interest in PTTGC, and a 36% interest in SPRC
3. Calculated by using total sales of refined petroleum products of Thai Oil in 2011 divided by total sales of petroleum products in Thailand in 2011. Data obtained from Energy Policy
and Planning Office, Ministry of Energy Thailand, the Company
4. Based on our internal estimates using the methodology of the Nelson Complexity Index.
35%
market
shares
2012 Market shares for refined petroleum product3 Total Thailand crude refining capacity 1,095 kbd
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Strategic location with competitive advantages in access to key markets
Our plants are located within the Sriracha
Complex
SBM provides direct access to deep water
ports, and ability to receive feedstock
directly from VLCC
We also enjoy available connections to
delivery networks such as multi-product
pipelines, including Thappline
Ø24”, 134 km
Saraburi
Lamlukka Don Mueng
Suvarnabhumi
ESSO
PTTGC SPRC IRPC
Map Ta Phut
Sriracha
BCP
Product pipeline system
Direct connection with product pipeline system
Access to Indochina markets through deep water ports
Our strategic location
provide us with
1. Close proximity with
the key domestic
markets and
Indochina
2. Direct access to deep
water ports
3. Direct connection
with multi-product
pipelines
Close proximity to the key domestic markets
Bangkok
Map Ta Phut
Gulf of Thailand
Sriracha (124 km from BKK)
THAILAND
LAOS
VIETNAM
CAMBODIA
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Competitive Performance Benchmarking
Shell Global Solutions International (SGSi) Solomon (Bi-Annually)
2012
2010
Operational Performance Review
Hydrocarbon Management Review
Operational Troubleshooting
Staff Competency Development
Knowledge Management & Research
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Integrated Margin & Competitive Cash Cost
3.1 3.9 4.4 5.9 5.1 4.3
6.4 5.3 3.4
2.0 4.8
8.6
4.8 5.4 1.5
1.5 2.1
2.1 1.7
1.7
2.0 2.0
1.4 1.4
1.9
1.9
1.8 1.8 1.0
1.0 1.3
1.3 0.9
0.9
0.5 0.5
0.8
0.8
1.2
1.2
0.8 0.8
7.9
4.3 5.6
7.8 7.6 8.8
5.6
7.9 7.4
4.3
6.1 6.3
9.3
6.9 7.7
4.2
11.7
8.0
2008 2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13
TOP TPX TLB
6.4
1.1
3.3 4.6
5.3 6.6
3.6 5.0 5.1
2.2 3.4
4.1
6.2 4.5 5.5
2.2
9.0
5.7
2008 2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13
0.9 0.9 1.0 1.1 1.2 1.2 1.4 1.2 1.3 0.4 0.5 0.5 0.4 0.4 0.6 0.7 0.6 0.6 1.4 1.4 1.5 1.5 1.6 1.8 2.1 1.8 1.9
2008 2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13
Operating Cost Interest Expense (Net)
Gross Refining Margin
(Unit: US$/bbl)
(Marketing GRM + Stock G/L)
TOP’s Cash Cost
(Unit: US$/bbl)
Gross Integrated Margin
(Unit: US$/bbl)
Group’s Cash Cost
(Unit: US$/bbl)
• contingency flooding cost which is a one time payment
• excluding employee benefit as per TAS#19 from 2011 onwards
*
*
Marketing GIM Accounting GIM
• Mkt GRM/GIM = Marketing GRM/GIM (excl. Stock gain/loss)
• Acct GRM/GIM = Marketing GRM/GIM + Stock gain/(loss)
(Marketing GIM + Stock G/L)
Marketing GRM Accounting GRM
1.1 1.1 1.2 1.4 1.5 1.4 1.6 1.4 1.5 0.5 0.5 0.5 0.4 0.4 0.6 0.6 0.6 0.6 1.6 1.7 1.8 1.8 1.9 2.0 2.2
2.0 2.0
2008 2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13
Operating Cost Interest Expense (Net)
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Financial Performance
11,435
5,652 6,999
9,961
14,777
5,823
-1,061
4,267
9,029
224
12,062
8,956
14,853
12,320
4,363
(1,565)
7,609
10,407
2008 2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13
NP (excl stk G/L before tax) NP (incl stk G/L)
399,125
284,123 318,391
446,241
447,432
104,914 93,233 108,500
306,647
2008 2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13
22,897
12,846 14,585
23,868 22,808
5,856 3,759
7,111
16,726
7,949
21,393 17,381
28,760
20,350
4,397 3,255
10,453
18,104
2008 2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 9M/13
EBITDA (excl stk G/L) EBITDA (incl stk G/L)
Sales Revenue
Unit: Million THB
EBITDA
Unit: Million THB
Net Profit
Unit: Million THB
* Stock G/(L) from 2011 onwards is include BOI Tax redemption on environmental projects
Net Profit Breakdown
Unit: Million THB
(Avg. from 2006-9M/13)
46%
33%
13% 8%
Refinery
Aromatics
Lube Base
Others
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TOP Group Key Highlights
Thailand’s largest and
one of the region’s
most advanced and
competitive refineries 1 Strategic relationship
and operational
integration with PTT as
the Group’s principal
refiner
3
Technological
superiority, logistical
advantages & cost
leadership
6
Industry with high
barriers to entry and
strong market
positioning
5 Strategic location with
competitive advantages
in access to key markets
4
Diversified earnings
through integration
with, and significant
contribution from, our
subsidiaries
2
Highly experienced
management team
7 Strong financial profile
8
Business Highlights
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Q3/13 : Business Highlights Economic / Industry Highlights
• Concerns over US debt ceiling, US Fed QE tapering,
Euro debt crisis and Chinese econ data
• Chinese econ reform under Li Keqiang govt. to
introduce Likonomics– no stimulus, deleveraging and
structural reform.
• Uncertainties in Middle East and North Africa
• Strong PX demand from polyester season together
with mending PTA markets whereas SM season
supporting BZ demand
• Healthy lube and bitumen demand from China,
Vietnam and Indonesia under lower cost of
feedstock price
• IEA cut 2013 & 2014 oil demand growth
• Plant outages and oil field maintenance season
caused tight supply situation supporting oil price
• Rising oil price resulted in Stock Gain
• Recovered GRM from increasing oil cracks
especially middle distillates
• Better Aromatics margins
• Improved lube base and bitumen margins
Financial Highlights Business Highlights
• BOI privilege tax exemption on emission & fuel
efficiency projects ~1,021 MB (accrual basis)
• Risk mgt via commodity hedging gain ~432 MB
Q3/13, and gain ~904 MB in 9M/13
• Depreciation of THB against USD ~0.3 THB/USD
causing minor FX loss at ~249 million THB
• 2013 Interim dividend paid 0.8 THB/share in Sep’13 ( 58% dividend pay out ratio)
Safety / Reliability / Flexibility / Efficiency
• Max run rate of TOP/ TPX/ TLB at 104%/ 95%/ 112%
• Better earnings contribution from subsidiaries;
oTP & TM: higher run rate after maintenance period in Q2
oTS: rising selling product price tracking its up-trend crude
oTET: improved gasohol demand after ULG 91 phase out w/
efficient operation of SAPTHIP; a cassava ethanol plant
• Member of DJSI Emerging Markets 2013
(99 percentile rank) assessed by RobecoSAM
Corporate Sustainability Assessment
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Awards & Recognitions
Asian Company Secretary of the Year
2013
SET Awards 2013
• Best Social Responsibility Award
• Top Corporate Governance Report
Award
CSRI Recognition 2013
• Best Social Responsibility Award (CSR
Awards)
Sustainability Report Award 2013
• Best Sustainability Report under the category
of Environmental, Social and Governance
(ESG)
Asian Excellence Recognition Awards 2013
• Best Investor Relations & Best CSR from
Best of Asia Recognition Awards 2013
• Asia’s Outstanding Company on
Corporate Governance
Alpha Southeast Asia 2013
• The Strongest Commitment to Sustainable
Energy in Southeast Asia
• The Strongest Adherence to Corporate
Governance
• The Best Strategic CSR
CSR-DIW Awards 2013
• CSR-DIW Advance 5 (CSR-DIW in Supply
Chain)
• CSR-DIW Continuous Award
Thai Energy Awards 2013
• Outstanding Renewable Power Award
under the category of Non-Grid Connect
renewable Electricity Generation Project
(Off-Grid)
Annual Platts Top 250 Asia Awards 2013
Top 250 Global Energy Company Rankings
• Rank 38th in Asia
• Rank 136th in the world
IR Magazine Awards – South East Asia 2013
• Winner of BEST IN SECTOR FOR ENERGY
•Finalist in GRAND PRIX FOR BEST
OVERALL INVESTOR RELATIONS (Small or
Mid-Cap) (in Southeast Asia)
•Finalist in BEST INVESTOR RELATIONS BY
A THAI COMPANY
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-462
4,267
9,029
-1,103
3,342
1,378
NP w/o Stock G/L Stock G/(L) LCM
Q3/13: Stronger-than-Expected Result
Top Group Net Profit
$/bbl Q2/13 Q3/13 9M/13
Marketing GRM 3.6 5.0 5.1
Stock Gain/(Loss) (1.4) 4.0 0.6
Accounting GRM 2.2 9.0 5.7
Unit : million THB
*redeemed BOI privilege for tax exemption on environmental projects in Q2/13 = None, Q3/13 = 1,021 MB and 9M/13 = 1,022 MB
Gross Refining Margin - GRM
Gross Integrated Margin - GIM
$/bbl Q2/13 Q3/13 9M/13
Aromatics 1.4 1.9 1.8
Lube base 0.8 1.2 0.8
Marketing GIM 5.6 7.9 7.4
Accounting GIM 4.2 11.7 8.0
Q3/13 Q2/13
Before tax
7,609 * MB (1,565)* MB 10,407* MB
9M/13
Performance Analysis
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101 111 107 106 116 106 106 107 108 101 106 107 20
40
60
80
100
120
140
160
Avg. Mar’12
122 $/bbl
Avg. Jun’12
94 $/bbl
Avg. Dec’10
89 $/bbl
Avg. Dec’11
106 $/bbl
Avg. Dec’13
108 $/bbl
Avg. Mar’13
105 $/bbl
Avg. Dec’12
106 $/bbl
Avg. Sep’12
111 $/bbl
Avg . Jun’13
100 $/bbl
Avg . Sep’13
108 $/bbl
Q3/13: Ongoing MENA Unrest…Escalating Crude Price
Unrest in Middle East & North Africa
Concern on US debt ceiling and stimulus package
Refining
$/bbl
Q1/11 Q2 Q3 Q4 Q1/12 Q2 Q3 Q4
106 109
Dubai Crude Oil Price
103.2 $/bbl
as of 20 Jan
Q1/13 Q4
Crude Absence…Short Supply
Jul Aug Sep Oct Nov Dec
104 107 108 107 106 108
Q2
• Debt Ceiling Crisis. If Congress doesn't raise the debt
ceiling, then they can’t auction any notes to pay bills.
• Uncertainty of QE tapering. FED maintained QE in
Sep’13 but if US’s economy improved as hoped, Fed
would withdraw QE in soon.
• Political violence in Egypt and South Sudan
• Iraq Disruption: oil dispute with Kurdish territory
• Syria’s chemical weapon issue: concerns on US
possible military intervention in Syria.
• Libya's oil output fell to below 145 KBD in the
end-Aug from 1.3 MMBD in Jun due to protest
closing oil terminals
• Supply outage at Buzzard oilfield
• Limited crude supply from North Sea due to
turnaround in Aug-13
• Atlantic hurricane season
IEA cut demand growth • IEA cut oil demand growth in 2013 by 30 KBD to 0.89
MMBD as the IMF world GDP forecast is reduced from
3.3% to 3.1%. Oil demand growth in 2014 is also cut
from 1.2 MMBD to 1.1 MMBD.
Q3
105
-24-
Q3/13: Favorable Jet/Diesel Margins…Higher GRM
Refining
-0.5 -1.3 -2.4 -9.0 -7.3
-3.6
-10.7 -10.4
-1.4 -7.2
4.0 4.6
7.7 5.2 6.6
3.6 5.0 5.4 5.1 15.6 16.0
20.2 19.3 20.3 15.3 17.0 17.3 17.2 17.8
14.3 13.9 15.9 13.4
18.4 14.6 12.4
9.2 14.7 15.1
-39.1 -41.7 -46.7 -32.6 -38.9 -41.6 -43.5 -35.0 -42.5 -41.3
+ Peak summer demand from the ME.
+ Refineries run cuts and outage in India and Taiwan
+ Open arbitrage from SK to UK
Q1TD 20 Jan (Unit: $/bbl) LPG - DB
ULG95 - DB
- End of US driving season & Ramadan season
- Lower demand from Indonesia and Vietnam due to
weak economy and currency.
JET - DB + Firm EU travel demand in summer
+ China’s refiners used up government export quotas
+ Refineries run cuts and outage in India and Taiwan
Diesel - DB
HSFO - DB
- High inflows from the West
- Slow demand from Chinese Teapot refineries
- Weak regional bunker demand
Gross Refining Margin - GRM
-28.4
13.9
17.7
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 Q4 9M/12 9M/13
16.4 15.3 19.3 17.5 19.6
16.8 17.3 17.7 17.1 17.9 17.4
-7.8
• LPG price = 76% CP price + 24%*333 $/ton.
Strong JET & Diesel
w/ max production
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 Q4 9M/12 9M/13
ULG95- DB
-25-
101 111 107 106 116 106 106 107 108 101 106 107 20
40
60
80
100
120
140
160
180
200
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
4.0 4.6
7.7 5.2
6.6
3.6 5.0 5.4 5.1
Uptrend Crude Price…Big Jump in Inventory Gain
Marketing Gross Refining Margin – Marketing GRM
Stock Gain/ Loss
Accounting Gross Refining Margin – Accounting GRM
(Unit: $/bbl)
(Unit: $/bbl)
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
5.2
(10.9)
4.4
(1.9) (1.1) (1.4)
4.0
(0.5)
0.6
9.2
(6.3)
12.1 3.3 5.5 2.2
9.0 4.9 5.7
(Unit: $/bbl)
Refining
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
Dubai Crude Oil Price
(Unit: $/bbl)
Q1/11 Q2 Q3 Q4 Q1/12 Q2 Q3
106
Q4
Avg. Dec’11
106 $/bbl Avg. Dec’10
89 $/bbl
Avg. Jun’12
94 $/bbl
Avg. Dec’12
106 $/bbl
Avg. Mar’12
122 $/bbl
Avg. Sep’12
111 $/bbl
109
Avg. Mar’13
105 $/bbl
Q1/13 Q2
Avg. Jun’13
100 $/bbl
Q3
Avg. Sep’13
108 $/bbl
103.2 $/bbl
as of 20 Jan
Q4
105
Avg. Dec’13
108 $/bbl
Jul Aug Sep Oct Nov Dec
104 107 108 107 106 108
-26-
27% 13% 7%
32%
29% 32%
41% 58% 61%
Oman Dubai Murban
Short Residue Waxy Gas/Distillates
82%
10%
8% 1%
8%
39%
19%
17%
14%
4%
Q3/13 Q3/13
Optimized & Flexible Operations…Superior Performance
Far East
Local
Middle
East
Sources of
Crude
Q3/13
1
Spread over
Dubai (US$/bbl)
-43.5
17.0
17.3
-10.7
12.4
Others
16.4
• Flexibility in crude intake allows diversification of crude types to source cheaper crude
• Flexibility in product outputs by maximizing middle distillates (jet and diesel) by
adjusting production mode to capture domestic demand and price premium
• Maximize Platformate production to capture higher margin on aromatics
• Minimize fuel oil output to avoid lower margin products
1. LPG price =
76% CP + 24%*333
$/ton
Refining
LPG
PLATFORMATE
GASOLINE
JET
DIESEL
FUEL OIL
Product
output
Domestic demand for
petroleum products*
*Source: Energy Policy and Planning Office, Ministry of Energy Thailand
4%
40%
11%
17%
28%
Q3/13
% S = 0.79
API = 39.7
% S = 1.54
API = 31.2
% S = 2.13
API = 30.4
Crude Assays based on
TOP configuration
Thai Oil is able to diversify its
type of crude intake and product
outputs to maximize demand
and margin
-27-
89% 80% 85%
11% 20% 15%
Q2/13 Q3/13 9M/13
Export
Domestic
Low Seasonal Demand…Lower Domestic Sales
38%
14% 7%
1%
20%
18% 2%
Domestic
Jobbers
Q3/13
Sales
Breakdown
Export = 20%
Refinery Intake
(KBD)
280 286
Refining
281
41%
13% 7%
2%
22%
13% 2%
Domestic
Jobbers
9M/13
Sales
Breakdown
Export = 15%
Domestic Oil Demand / Domestic Refinery Intake Domestic Oil Demand
653 648 624 626 686 694 640 689 724 698 667 691 711
83% 87% 88%
79%
92% 88% 85%
89% 93% 89% 92% 90% 91%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
-
200
400
600
800
1,000
1,200
Q1/11 Q2 Q3 Q4 Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 H1/12 H1/13
Domestic Demand/Sales Net Export Others Utilization Rate
KBD Utilization = 102%
TOP’s Domestic & Export Sales
Domestic Oil Demand
KBD
-28-
(US$/Ton) Q1/12 Q2 Q3 Q4 2012 Q1/13 Q2 Q3 9M
P2F -$/ton 138 125 98 139 126 155 127 142 142
P2F -$/bbl 18.1 16.3 12.8 18.2 16.4 20.3 16.5 18.6 18.5
Q3/13: Strong Demand & Lower Cost…Improved Margins Aromatics Spot Prices and Margins
(US$/Ton) Q1/12 Q2 Q3 Q4 2012 Q1/13 Q2 Q3 9M
PX-ULG95 482 380 394 536 448 534 435 452 474
BZ-ULG95 72 84 139 336 158 303 305 249 285
123 94 136 126 132 123 134 40 43
52 31 54 59 61 27 28
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3
TL
BZ
MX
PX
TPX’s Sales & Product-To-Feed Margin (P2F)
2013 Aromatics Production
Q2 Q3 9M
87% 95% 88%
(Unit : KTon)
Aromatics
0
400
800
1,200
1,600
2,000
PX
MX
ULG 95
BZ
TL
Q2 Q1/12 Q4 Q3 Q3
(US$/Ton) 448
158
PX
BZ
358
328
Q1/13
534
303
435
305
Q2
452
249
Q1/14TD(9 Jan)
Paraxylene (PX) + Polyester seasonal demand
+ Lower feedstock cost following
ULG 95 price
+ High PTA margin resulting in
rising operating rate
+ Tight supply as some reduced
operating rate as PX‐MX spread
was narrow
- New Chinese supply
(Tenglong) : PX 800 KTA
- High supply from olefin
crackers supporting winter
demand in Q4
- High inventory in China & US
+ SM seasonal demand together
with the restart of SM plants in
Saudi and Taiwan
Benzene (BZ)
422
297
Q4
-29-
74 66 62 57 72 62 77 42 38 32 35 40 40 43 89 108 82 88 84 88 98
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3
Bitumen
TDAE/Extract
/Slack Wax
Base Oil
(US$/Ton) Q1/12 Q2 Q3 Q4 2012 Q1/13 Q2 Q3 9M
P2F -$/ton 132 143 145 120 135 118 132 158 139
P2F -$/bbl 20.0 21.7 22.1 18.3 20.5 18.0 20.1 24.0 21.2
Q3/13: High Demand & Impressive Run Rate…Robust Margins
Base Oil & Bitumen Spot Prices & Margins
(US$/Ton) Q1/12 Q2 Q3 Q4 2012 Q1/13 Q2 Q3 9M
500SN-HSFO 500 621 497 460 519 419 494 519 477
BITUMEN-HSFO -99 -32 -41 15 -39 -19 -7 -3 -10
TLB’s Sales & Product-To-Feed Margin (P2F)
2013 Base oil Production
Q2 Q3 9M
105% 112% 105%
(Unit : KTon)
Lube Base
Lube Base Oil
+Strong demand from China
+ Lower feedstock cost following
HSFO price
+ Tight supply from plant
turnaround across N.E.A.
- Arbitrage cargo from Russia
+Lower feedstock cost
following HSFO price
+Firm Indonesian &
Vietnamese demand for
paving projects.
- Slow Chinese demand due to
tight monetary policy
- Rainy season pressured
paving activities
Bitumen
0
400
800
1,200
1,600
2,000
BITUMEN
500SN
HSFO
TDAE
-39
500 SN
Bitumen
495
-33
(US$/Ton)
Q2 Q1/12 Q4 Q3 Q1TD(9 Jan)
419
-19
Q1/13
519 494
-7
Q2
519
-3
Q3
509
-27
Q4
-30-
20.0 21.7 22.1 18.3 18.0 20.1 24.0 21.2 21.2
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
3.8 4.4 7.3
4.9 6.4 3.4 4.8 5.1 4.8
2.1 1.7 1.2
1.8 2.0
1.4 1.9 1.6 1.8 0.9 1.1
0.9
0.6
0.5
0.8 1.2
1.0 0.8
6.7 7.2 9.3
7.3 8.8
5.6 7.9 7.7 7.4
TOP TPX TLB GIM
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
8.7
-6.0
11.5
3.1 5.3 2.0
8.6 4.7 5.4
2.1
1.7
1.2
1.8 2.0
1.4
1.9
1.6 1.8
0.9
1.1
0.9
0.6 0.5
0.8
1.2
1.0 0.8
11.7
-3.2
13.5
5.6 7.7
4.2
11.7
7.3 8.0
TOP TPX TLB GIM
Beauty of Integration…Sustainable GIM
(US$/bbl) 18.1 16.3 12.8
18.2 20.3 16.5 18.6 15.9 18.5
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
4.0 4.6 7.7 5.2 6.6 3.6
5.0 5.4 5.1
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
Marketing GIM Accounting GIM
Crude
Product to Feed
Product to Feed
Marketing GRM (excluded stock gain / loss)
24% to GIM
61% to GIM
15% to GIM
(US$/bbl) (US$/bbl)
Integrated Margin
Q1/12 Q2 Q3 Q4 Q1/13 Q2 Q3 9M/12 9M/13
-31-
**
Q3/13: Performance Breakdown
PUBLIC
5,506 1,062 666 378 97 77 61 9 7,609
(3,457) 643 244 N/A 5 (5) 21 63 (2,463)
8,415 365 332 22 15 41 14 14 9,174
NP
∆YoY
∆QoQ
32.39%
holding
74%
holding
Q3/13 Net Profit Breakdown (include stock gain / loss)
Conso.
104% 95% 112%
97% 91% 117%
85% 99%
57%
97% 87% 86% 95% 83%
135%
81%
44%
65%
Q3/13 Q3/12
Acc GRM
($/bbl)
P2F
($/ton)
P2F
($/ton)
Q3/12 12.1 98 145
Q3/13 9.0 142 158
Performance Breakdown
Stock G/(L) 3Q/13* = 3,342 MB
Net Profit excl. stock G/(L)* = 4,267 MB
*before tax
***
** Apply on an equity accounted basis in the consolidated financial statement.(GPSC has been hold by TOP 11.88% and TP 27.71% since 10 Jan 13)
***TP performance only (excluding 27.71% shares of profit from the investment in GPSC)
• TM: VLCC-Tenyo resume operation in Jul 13. NP from TOP-NYK=12 MB,TMS= 20MB
• TS: SAKC plant had 14-day turnaround in 15-29 Aug 13.
• TET: MCE had planned maintenance in 20 Sep – 5 Oct, SAP had smoothly operated
resulting higher run rate
Refinery Utilization
Aromatic Production
Lube Base Production
IPT Plant Availability
TP Plant Utilization
SAKC Utilization
Ship Utilization
Sapthip
Utilization
Mae Sod
Utilization
(Unit: million THB)
-32-
**
9M/13: Performance Breakdown
PUBLIC
5,180 2,646 1,176 850 276 161 153 46 10,407
(648) 276 (337) N/A (2) (86) (9) 190 12
Refinery Utilization
Aromatic Production
Lube Base Production
IPT Plant Availability
TP Plant Utilization
SAKC Utilization
Ship Utilization
Sapthip
Utilization
Mae Sod
Utilization
NP
∆YoY
32.39%
holding
74%
holding
9M/13 Net Profit Breakdown (include stock gain / loss)
Conso.
Acc GRM
($/bbl)
P2F
($/ton)
P2F
($/ton)
9M/12 4.9 121 140
9M/13 5.7 142 139
Performance Breakdown
Stock G/(L) 9M/13* = 1,378 MB
Net Profit excl. stock G/(L)* = 9,029 MB
*before tax
***
** Apply on an equity accounted basis in the consolidated financial statement.(GPSC has been hold by TOP 11.88% and TP 27.71% since 10 Jan 13)
***TP performance only (excluding 27.71% shares of profit from the investment in GPSC)
102% 88%
105% 90% 87%
127%
84% 80% 72%
101% 84%
100% 80% 87%
137%
90%
36%
76%
9M/13 9M/12
• TM: VLCC-Tenyo resume operation in Jul 13. NP from TOP-NYK=13 MB,TMS= 40MB
• TS: SAKC plant had 14-day turnaround in 15-29 Aug 13.
• TET: MCE had planned maintenance in 20 Sep – 5 Oct, SAP had smoothly operated
resulting higher run rate
(Unit: million THB)
-33-
306,647 335,677 (29,030)
18,104 15,937 2,167
(2,818) (1,751) (1,067)
(1,297) 1,567 (2,864)
(941) (1,053) 112
10,407 10,395 12
(US$/bbl) Q3/13 Q2/13 Q3/12 QoQ+/(-)
Marketing GRM 5.0 3.6 7.7 1.4
Marketing GIM 7.9 5.6 9.3 2.3
Accounting GIM 11.7 4.2 13.5 7.5
EPS (THB/Share) 3.73 (0.77) 4.94 4.50
THB/US$ - average 31.62 30.05 31.51 1.57
THB/US$ - ending 31.53 31.27 30.97 0.26
Effective Tax Rate (%) 7% N/A 4% N/A
5.10 5.10 0.00
30.55 31.36 (0.81)
31.53 30.97 0.56
8% 9% N/A
Consolidated Financial Performance
• In 2013, the corporate income tax rate is reduced to 20% from 23%
• redeemed BOI privilege for tax exemption on environmental projects in Q3/13 = 1,021 MB, Q2/13 = None, 9M/13 = 1,022 MB
(million THB)
Sales Revenue 108,500 93,233 106,203 15,267
EBITDA 10,453 3,255 11,653 7,198
Financial Charges (965) (987) (600) 22
FX G/(L) & CCS (249) (2,764) 989 2,515
Tax Expense* (555) (116) (386) (439)
Net Profit / (Loss) 7,609 (1,565) 10,072 9,174
Financial
9M/13 9M/12 YoY+/(-)
5.1 5.4 (0.3)
7.4 7.7 (0.3)
8.0 7.3 0.7
-34-
74,523 76,567
72,257
80,178
53,880
57,802
87,379 93,933
74,149 79,630
39,132 40,984
Strong Financial Performance
0.9 1.3
1.0
31-Dec-12 30-Jun-13 30-Sep-13
0.2 0.3 0.2
31-Dec-12 30-Jun-13 30-Sep-13
Statements of Financial Position Consolidated Long-Term Debt as at 30 Sep 13 1)
1) Including current portion of Long-Term Debt
Policy ≤ 1.0x Policy ≤ 2.0x
2) EBITDA 9M/13 (excl stock loss & LCM)*4/3
Financial Ratios
79,630 million THB
(US$ 2,525 million)
22,221 million THB
(US$ 705 million)
Net Debt / EBITDA2) Net Debt / Equity
Total Long-Term Debt Net Debt
Cost of Debt (Net*)
TOP Group 2.66%*
Financial
BBB
Stable Outlook
Baa1
Stable Outlook
AA-
Stable Outlook *Annualized interest expense net off interest income as per FS as at 30 Sep 13
(actual 9M/13*4/3)
As at 30 Sep 13 (31.53 THB/US$)
(Unit: million THB)
Trade Payable
/ Others
LT Debt1)
214,547 200,660
Equities
Current
Assets
Non-Current
Assets
Cash & ST
investment
30 Jun 13 30 Sep 13
Interest Rate Currency
12% Float 30% THB
88% Fixed 70% USD
96%
3% 1%
US$
Bond
62%
US$
Loan
8%
THB
Bond
26%
THB
Loan
4%
-35-
7.82
9.19
8.13
9.40
0.11
5.91
4.41
7.28 6.04
1.37 1.80
3.50 3.50
4.50
2.75 2.55
2.00
3.30
2.70
0.80
FY/04 FY/05 FY/06 FY/07 FY/08 FY/09 FY/10 FY/11 FY/12 1H/13
Dividend Payment
Dividend Payment THB/Share Payout
FY/04 1.80 25%
FY/05 3.50 40%
FY/06 Interim Annual
3.50 1.50
2.00
45%
FY/07 Interim Annual
4.50 1.75
2.75
48%
FY/08 Interim Annual
2.75 1.75
1.00
n.a.
FY/09 Interim
Annual
2.55 1.05
1.50
43%
FY/10 Interim
Annual
2.00 0.60
1.40
45%
FY/11 Interim
Annual
3.30
1.30
2.00
45%
FY/12 Interim
Annual
2.70 0.50
2.20
45%
FY/13 Interim
0.80 0.80
58%
Dividend Policy :
Not less than 25% of consolidated net profit after deducting reserves, subject to cash flow and investment plan
25%
40%
45%
48%
Yield* 4.0% 5.6% 5.6% 6.2% 5.2% 7.1% 4.0% 4.7% 4.2% 1.2%
n.a.
43%
THB/Share
45%
* Based on average TOP price in each year
45%
EPS
Total dividend
Financial
45%
TOP price
44.70 63.04 62.71 72.66 53.31 35.88 49.85 69.78 65.09 67.68
58%
Q4-2013 and 2014 Market Outlook
• Macroeconomics & Crude Prices
• Petroleum Market
• Aromatics & Base Oil
• Conclusion
Macroeconomics & Crude Prices
Crude Prices slightly soften in Q1-14 pressured by
supply resumption in Libya, QE Tapering in US. But downside is
limited supported by strong refinery demand during winter season
-38-
2014 Global GDP Growth by IMF
Macroeconomics & Crude Prices
Advanced economy countries are expected to drive world economic growth in 2014
2.8%
-0.6%
5.2% 3.9%
3.2% 2.9%
3.6%
-9%
-6%
-3%
0%
3%
6%
9%
12%
2008 2009 2010 2011 2012 2013 2014
Growth (%YoY)
China
India
Japan
Thailand
US
EU
ASEAN-5
World
** NESDB Economic Outlook ,18Nov2013
*** ASEAN-5 includes Thailand, Malaysia, Indonesia, Vietnam, Philippines
•IMF World Economic Outlook (WEO) Oct, 2013
**
2012 2013* 2014*
7.7% 7.6% 7.3%
3.2% 3.8% 5.1%
2.0% 2.0% 1.2%
5.9% 3.0% 4.5%
2.8% 1.6% 2.6%
-0.6% -0.4% 1.0%
6.2% 5.0% 5.4%
3.2% 2.9% 3.6%
***
-39-
Global Oil Demand Growth in 2014
Macroeconomics & Crude Prices
IEA Demand
(mbd) Growth
(mbd)
2012 89.98 +1.02
2013 91.17 +1.19
2014 92.37 +1.20
OPEC Demand
(mbd) Growth
(mbd)
2012 88.90 +0.80
2013 89.80 +0.80
2014 90.80 +1.10
EIA Demand
(mbd) Growth
(mbd)
2012 89.17 +0.87
2013 90.28 +1.11
2014 91.43 +1.15
IEA forecasted 2014 global oil demand increases to around 1.2 mbd on stronger GDP
Unit: KBD
-540
-60 -60
Europe
1140
410 580
Asia 250 150 210
Middle East
160 130 180
Africa
230 210 160
Latin America
-340
230 10
North America
100 120 120
FSU
Source: IEA, Oil Market Report, December 2013
Source: IEA, Oil Market Report December 2013 Source: EIA, Short Term Energy Outlook December 2013 Source: OPEC, Oil Market Report December 2013
2012/2013/2014
• Revising up global oil demand
for 2013 on the back of
stronger‐than‐ expected economy
for EU and US in recent months
• Emerging and newly
industrialising economies will
continue to provide the majority
of the world’s upside demand
momentum through 2014
-40-
Non-OPEC Supply Growth in 2014
Macroeconomics & Crude Prices
IEA forecasted 2014 global oil supply increases around 1.72 mbd mainly from North America
-310 -160 -150
Europe
-200
110
-170
Asia -190 -100 -40
Middle East
-330
70 230
Africa
-60
10 150
Latin America
1250 1380 1150
North America
50 220 150
FSU
Source: IEA, Oil Market Report, Decmber 2013
2012/2013/2014
IEA Supply
(mbd) Growth
(mbd)
2012 53.35 +0.55
2013 54.77 +1.42
2014 56.49 +1.72
OPEC Supply
(mbd) Growth
(mbd)
2012 50.80 +0.49
2013 51.96 +1.16
2014 53.14 +1.18
EIA Supply
(mbd) Growth
(mbd)
2012 52.67 +0.61
2013 54.16 +1.49
2014 55.93 +1.77
Source: IEA, Oil Market Report December 2013 Source: EIA, Short Term Energy Outlook December 2013 Source: OPEC, Oil Market Report December 2013
Unit: KBD
• Higher global oil supply for 2013
driven by an increase in non‐OPEC
production that was partly offset by
lower OPEC output
• Many market players have
speculated that fast‐rising
production from US tight oil could
put pressure on OPEC’s crude oil
output in 2014
-41-
OPEC to Balance Demand/Supply
Macroeconomics & Crude Prices
Due to increasing in Non-OPEC oil supply, OPEC crude production will drop to 29.3 MBD
Source: IEA, Oil Market Report, December 2013
40
50
60
70
80
90
100
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2011 2012 2013 2014
OPEC Crude
OPEC NGLs
2013 2012
Growth Rate (MBD)
2014
Well-supplied oil market in 2014 (MBD)
+0.4
+0.6
+1.1
+0.1
+1.4
+1.2
+0.2
+1.7
+1.2
OPEC Crude
Production
2012
30.3 MBD
OPEC Crude
Production
2013
30.0 MBD
OPEC Crude
Production
2014
29.3 MBD
-42-
Instable Supply from Libya, South Sudan and Iraq
Oil Prices are supported by limited Libyan Supply, recent violence in South Sudan and instable Iraqi crude oil
Nigeria : 2,417 kbd
• Northern unrest led by Islamists
Algeria : 1,667 kbd
• Gas field was raid by
Islamist militants
Libya :1,600 kbd (600 kbd)
• Internal Conflict
in the post - Gaddafi
• Closed oil terminal due to the protest
Sudan and South Sudan : 455 kbd (400 kbd)
• Latest Civil War in S.Sudan
• Border disputes • Oil export via pipeline dispute
Egypt : 728 kbd (650 kbd)
• Egypt's political crisis
after Morsi period Israel : 4 kbd
• Conflict with
Palestine,
Iran, neighboring
countries
Iraq : 3,115 kbd (3.000 kbd)
• Internal dispute after
US army out
• Oil dispute with Kurdish territory
Note: Crude Oil Production from BP, 2013
Tunisia : 65 kbd
• Opposition leader assassination
• Protests across the country
• PM dissolved the parliament
Syria : 164 kbd (20 kbd)
• Internal unrest continues • Concerns over chemical weapons
Iran : 3,680 kbd (< 2,600 kbd)
• Western sanction for oil export
•Conflicts with the West and Israel due
to nuclear program
• Not yet allow IAEA to scrutinize
Parchin military site
Macroeconomics & Crude Prices
-43-
$106
$100 $102 $104 $106
$109 $106
70
80
90
100
110
120
70
80
90
100
110
120
2011 2012 2013 1Q14 2Q14 3Q14 4Q14
$/BBL $/BBL
Latest Forecast Actual
In 2014 … Crude Price Should be Slightly Soften On Average
Macroeconomics & Crude Prices
What We See….Ongoing MENA Unrest & High demand during winter should support crude
price in Q1. However, from Q2 onwards, incremental Non-OPEC supply should
pressure crude oil prices
… Factors to watch for 2014 …
Unstable supply from Libya
Speed of QE Tapering
*Estimated as of 3 Jan 14
2014 Dubai $103
Rising US Tight Oil Production
Nuclear Activities In Iran under agreement with P5+1
-44-
Impact of higher US tight oil on crude spread – Opportunity for Asian refinery to buy more W. African crude
Macroeconomics & Crude Prices
US crude oil imports MBD
Forecast
Pipeline capacity from Cushing to USGC
Source: Wood Mackenzie, Jul 2013
Source: FGE, June 2013
Source: EIA
Brent – Dubai To be narrowed as more crude
available in global market
weighs down Brent price
Tight Oil
NGLs
Conventional Crude
-45-
Potential Effects from QE Tapering on Crude Oil Prices
What We See…. Expect QE tapering (end of easy money era) to have negative effect on crude
prices thru tighten money market & strong dollar value
Source : Bloomberg
“Since 2009, the figures show some correlation between
Brent crude price & US money supply”
QE 1 (Dec-09) QE 2 (Aug-10)
QE 3 (Sept-12)
QE 4 (Dec-12)
Petroleum Product Market
Expect Firm GRM in Q1-14 supported by strong winter
demand and refinery closure in Japan
Keep Watching New Supply from ME and Chinese Refinery!!
-47-
2013-14 Refinery Status
-1,500
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
2009 2011 2013 2015 2017
KBD
AP Additional Demand ME Additional Demand
AP CDU Addition China
India Japan
Others ME CDU Addition
Net Capacity
CDU Capacity Addition VS Additional Demand – AP & ME
Addition KBD Company
China Q2-13 200 PetroChina Pengzhou (Sichuan)
Q4 -13 240 Sinochem Quanzhou (Fujian)
Saudi Q4-13 400 SATORP [Aramco/Total] (Jubail)
China Q1-14 120 PetroChina (Urumqi)
Q2-14 160 Sinopec (Jiangsu)
Q4-14 200 CNPC (Yunnan)
India Q1-14 120 Nagarjuna Oil (Cuddalore)
Q2-14 300 IOC Paradeep
Closure KBD Company
China Q4-13 -100 Local refinery
Japan Q1-14 -377 Tonen/ Idemitsu/ JX Nippon
China Q2/Q4 -70/-70 Sinopec (Jiangsu) / (Jiangxi)
Q4-14 -100 Local refinery
Australia Q2-14 -125 Caltex (Kurnell)
Q4-14 -105 Shell (Geelong)
Trial runs in late-Dec and expect to be fully runs in Q1-14
Delay to Q3-15
CDU Addition VS Additional Demand – AP & ME
Source: FACTs fall 2013
Revised to (-80)
Expected to be fully runs in Oct-14
Delayed from mid-2013 to Q1-14
-48-
Expect lower Chinese Gasoil export in 2014 after China levied new import tax on Biodiesel Blend since Dec 15, 2013
Normal Gasoil Wholesale Price Normal Gasoil Wholesale Price Import cost of biodiesel Import cost of biodiesel
Yuan / mt
Prior to Dec 15, 2013 After Dec 15, 2013
Cost Comparison b/w normal gasoil wholesale price vs import biodiesel in China
Total 8,701 Profitable to import
biodiesel into China
Not profitable to
import biodiesel
Source : Reuter
China Biodiesel Import China Normal Gasoil Export
2012 (Jan – Oct) 0.01 Mbbl/Month 0.90 Mbbl/Month
2013 (Jan – Oct) 1.12 Mbbl/Month 1.70 Mbbl/Month
• Expect lower Chinese Gasoil in 2014 compared to 2013 after Chinese government closed the tax loophole on Dec
15, 2013 by imposing consumption tax on biodiesel import, making biodiesel import unprofitable (expect
significantly less biodiesel import into China in 2014)
-49-
Firm GRM on Higher Winter Demand & Improving Regional Demand… KEEP Watching Full Impact of 400 KBD Jubail refinery
Factor to watch for Q1-14…
+ Seasonal high winter demand
+ Less-than-expected CN’s export
due to Qingdao pipeline explosion in Nov
What happened in Q4-13
* Compared to Q4-13
($/bbl) 2013FY Q4-13 Q1-14* 2014FY**
LPG ($/t) 868.3 957.6
ULG95-DB 13.6 9.2
JET-DB 17.5 17.3
GO-DB 17.8 17.7
HSFO-DB -8.0 -10.4
** Compared to 2013FY Remark :
- Slow Indonesia & Vietnam
import demand
+Expect less Chinese export as
government impose import tax
on biodiesel
+ Less export from Japan due to refinery closure
(regulation by Apr 1, 2014)
- Full effect of new supply from
Jubail refinery (400 KBD) and
Chinese refinery
-50-
Demand continue to grow supporting from economic growth
Petroleum Market
2012 11M-2013 2014F
LPG +7 % +2% +4%
Gasoline +5 % +8% +1%
Jet/Kero 0 % +10% +2%
Gasoil +7 % +2% +2%
Fuel Oil -4 % -10% -13%
Total (exclude LPG) +5 % + 3% +2%
% year on year
NESDB estimated GDP in 2014 will growth by 4.0 – 5.0% due to increasing
growth of export supported by the global economic recovery and steadily increasing in private investment and consumption.
LPG
& “Thailand economic growth & Factor to Watch Floating LPG retail price – Auto”
Government plan to increase LPG retail price for transport sector after the
price of household had reached to the same level as transport sectors, at 21.38
baht. After that, the increase will continue for both sectors until the price reaches
24.82 baht, equal to LPG gas-separation plant production cost.
Aromatics
PARAXYLENE ….
Delay in New PX Capacities Help Limit Downside
-52-
Status of New PX Capacities
Aromatics
Source: CMAI and PCI Xylene&Polyesters
Addition Timing KTPA Company and (Site)
India Mar 920 ONGC Mangalore Petrochemicals
Saudi Arabia Mar 660 SATORP
China Mar 650 Petrochina Sichuan Petrochemical
Singapore
Jun 800 Jurong Aromatics Corp
Korea Jun 1,000 Ulsan Aromatic
Korea Jul 1,200 SK Energy
Korea Aug 1,000 Samsung Total 2
Algeria Sep 220 Sonatrach
Kazakhstan Sep 469 JSC KazMunaiGas
(KTPA)
+ Tight PX supply will continue in Q1’14 due to:
• Delay in New PX capacities to late Q1
• Outages of Tenglong2 (800 KTPA) and TPPI (550
KTPA) after start-up in Q4’13
• Force majeure at Qingdao Lidong Chemical (800
KTPA)
- However, soft demand during Chinese New Year
holiday and strong ULG 95 will limit upside.
HC
Petr
och
em
Ten
glo
ng
1
Ten
glo
ng
2
Sin
op
ec H
inan
TP
PI
Feedstock Uncertainty
Own Feedstock
-53-
BZ Demand/Supply Outlook “Less BZ supply from Pygas”
Aromatics
Source: CMAI
“Global BZ Supply And Demand Addition”
1.6 MT Growth
per year
1.5 MT Growth
per year
Forecast Total Capacity Addition 14.6 MT
Total Demand Addition 14.0 MT
1.0
1.5
2.0
2.5
3.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Million Tons
“BZ Imports by North America”
Higher BZ Import
Pygas
36%
HDA
2%
PX
20% Coke
5%
Reformate 39%
2018
Pygas 38%
HDA 3%
PX 16%
Coke 6%
Reformate 36%
2012
• New BZ capacity of 1.6 million tons/year will be added,
while demand is expected to grow at 1.5 million
tons/year.
• 80 % of additional capacity is from Asia with over 40%
from China
• Tighter BZ supply in North America as
• Refinery will reduce reformate production due to
lower gasoline demand
• Olefin crackers use lighter feed (Shale gas)
Ethane
Propane
Butane
Naphtha Cracker
US Ethylene Crackers Feedstock
Source: CMAI, Nexant TOP Estimate
Global BZ Supply Source
Capacity 57 Mil Tons (2012)
-54-
($/t) 2013FY Q4-13 Q1-14* 2014FY**
PX-ULG95 461 422
BZ-ULG95 289 297
TL-ULG95 148 153
Note: PX = Paraxylene, BZ = Benzene, TL = Toluene
Delay in New PX Capacities Help Limit Downside
Aromatics
What happened in Q4-13 .…
+ Arbitrage window from Asia to US open
+ New supply delay in line with new PX
plants (0.72 mil tons)
+ Stockpiling demand ahead of new PX
plants start-up
+ Unplanned shutdown of refineries in
US and EU (800 KTPA)
+ Delayed in restart of aromatics plant
- Restarted of TPPI (PX 550 KTPA)
- Squeezed PTA margins
+ Delayed in restart of new aromatics
plants (2.2 mil tons)
PX:
BZ:
+ Declined in TL inventory in China
+ High demand for gasoline blending
TL:
- Strong ULG95 price
- Start-up of Sinopec Hainan(PX 600 KTPA)
+ TPPI Outage (PX 550 KTPA)
+ 2.2 million tons of new PX plants delay to Mar
PX:
BZ:
TL:
Factor to Watch for Q1-14 ….
* Compared to Q4-13 ** Compared to 2013FY
Lube Base & Bitumen
Supply from new base oil plants pressured market sentiment
-56-
Flooding of Group II & Group III Supply
Global base oil demand remain on an uptrend, growing at 1.4% p.a., with the rising of Gr.II & III consumption.
Fuel economy and emission standard require premium base oil.
Surplus capacity of Gr.II and Gr.III in Asia Pacific (including ME) will lead to base oil price competition.
Lube Base & Bitumen
0
2,000
4,000
6,000
8,000
10,000
12,000
2013 2014 2015 2016 2017 2018
Gr.II_Capacity Gr.II_Demand
0
2,000
4,000
6,000
8,000
10,000
12,000
2013 2014 2015 2016 2017 2018
Gr.III_Capacity Gr.III_Demand
MT
MT MT
0
2,000
4,000
6,000
8,000
10,000
12,000
2013 2014 2015 2016 2017 2018
Gr.I_Capacity Gr.I_Demand
Gr.II Demand Growth = 8% Gr.III Demand Growth = 11% Gr.I Demand Growth = -2%
MT
Source : TOP Estimate, ICIS –china, Kline, Lube and grease
-50
0
50
100
150
200
250
300
Jan
-11
Feb
-11
Mar-
11
Ap
r-11
May-1
1
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct-
11
No
v-1
1
Dec-1
1
Jan
-12
Feb
-12
Mar-
12
Ap
r-12
May-1
2
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct-
12
No
v-1
2
Dec-1
2
Jan
-13
Feb
-13
Mar-
13
Ap
r-13
May-1
3
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct-
13
No
v-1
3
Dec-1
3
Jan
-14
Gr.II-Gr.I
Gr.III-Gr.I
Spread of Gr.II - Gr.I and Gr.III –Gr.I $/Ton
-57-
Bitumen Market
Lube Base & Bitumen
Strong HSFO price pressured on bitumen spread
Slow demand from Indonesia as road projects were mostly finished at year end
Demand from Vietnam and Australia supported bitumen market
-140
-100
-60
-20
20
60
100
140
0
100
200
300
400
500
600
700
800
Jan
-11
Feb
-11
Mar-
11
Ap
r-11
May-1
1
Jun
-11
Jul-
11
Au
g-1
1
Sep
-11
Oct-
11
No
v-1
1
Dec-1
1
Jan
-12
Feb
-12
Mar-
12
Ap
r-1
2
May-1
2
Jun
-12
Jul-
12
Au
g-1
2
Sep
-12
Oct-
12
No
v-1
2
Dec-1
2
Jan
-13
Feb
-13
Mar-
13
Ap
r-1
3
May-1
3
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct-
13
No
v-1
3
Bitumen-HSFO Bitumen Price FOB Asia HSFO FOB SG $/MT $/MT
-58-
More supply from Gr.II pressured Gr.I base oil market
Lube Base & Bitumen
($/t) 2013FY Q4-13 Q1-14* 2014FY**
500SN-HSFO 485 509
Bitumen-HSFO -14 -27
What happened in Q4-13 Factor to Watch for Q1-14
* Compared to Q4-13 ** Compared to 2013FY Remark :
• Demand from oil-drain interval in
early Q4 for 150SN and 500SN
• Limited supply from plant
turnarounds in Oct
• Abundant supply from return of
plant turnaround and restarting of
new Gr.II plants in Nov
• Arbitrage cargos from Russia and
US to Asia Pacific
• Slowdown in demand for both
base oil and bitumen in Dec
• Restocking activity after New Year
holiday
• Stronger fuel oil price pressures
base oil and bitumen margin
• Price competition from ample
supply of Gr.II
• Low trading activity during New
Year and Chinese New Year in Jan
Conclusion
-60-
Firm Fundamental
Conclusion
“Resume Supply in Libya , QE Tapering And Deal on Iran Nuclear
Pressure Crude Price in Q1-14 But high winter demand limit downside”
“Firm GRM in Q1 on High Winter Demand and expected lower Chinese
export compared to 2013”
CRUDE &
REFINERY
“Firm PX Market from Ongoing Delays in New PX Capacity”
“Arbitrage window from Asia to US open, causing lower BZ
supply in Asia ”
AROMATICS
“Base Oil Margin was softer as market players expected more
supply from new base oil plants during 1H of Y2014
“ Low demand of Bitumen during winter pressured Bitumen
Margin”
LUBE BASE
TOP Way Forward
-62-
Broadening Growth, Capturing Step Out ,Pursuing Sustainability
Logistics
AEC countries
Value Chain Enhancement
Adjacent
Quick win
Core Business
Geography
New Business
Operational Excellence Growth (Core & Step Out)
-63-
Strategic Investment Plan
Projects COD Total
Project Cost 2013 2014 2015
After
2015
Refinery upgrading 2014 137 72 56
Reliability, efficiency and flexibility
improvement
- 365 56 99 69 47
Environmental and fuel efficiency
improvement
- 317* 150 135 9
CDU-3 preheat train 2014 68* 13 55
Benzene Derivatives - LAB 2015 300 74 142 57 27
GPSC investment End 2013 75 75
Power – 2 SPPs 2016 380 4 173 161 41
Solvent expansion – SAKC 2014 60 35 11
Aframaxs / Crew boats 2013/14 47 47
Total 1,751 481 669 297 163
CAPEX Plan (Unit US$ million)
Notes: Excluding approximately 40 M$/year for annual maintenance
*anticipated to receive BOI 100% of actual investment cost
Projects under
review/study
COD Total
Project Cost
2013 2014 2015 After
2015
Jetty 7,8 Q1-15 162 1 85 70 6
Our CAPEX investments will
cover improvements in
plants reliability, efficiency
& flexibility, environmental
& fuel efficiency
improvement as well as
value chain enhancement
Thai Oil has sufficient
internal cash flow to fund
this investment plan
$1,610 m
Remaining capital investment
-64-
Project Update
Project Detail Progress
HCU Revamp:
• Phase I: PSA-3
• Phase II: HVU-2
Revamp
• Increase high purity hydrogen production to gain margin
from high sulphur crude processing
• Maximize lube base oil production while increasing
Gasoline/Jet/Diesel production
• CAPEX = 137 M$
• COD = 2014
• COMPLETED Basic Design
Package (BDP) & Basic
Design Engineering Package
(BDEP)
• CONSTRUCTION PHASE
(overall progress 94.2%)
Max Lube
Higher Middle Distillates
Lower Fuel oil
-65-
Project Update
Project Detail Progress
Emission
Improvement
Project (EIP)
• To control flue gas quality according to the new
emission law (New emission law limits SOX < 500
ppm from Dec 2013 onwards)
• To build spare capacity for flue gas treating unit • CAPEX = 233.0* M$
• COD = 4Q2013
• CONSTRUCTION PHASE
(overall progress 94.2%)
* BOI privileges : Exemption of corporate income tax for 8
years at 100% of actual investment cost for emission
reduction projects .
-66-
Project Update
Shell & Tube Heat Exchanger Plate Heat Exchanger Tray
Project Detail Progress
CDU-3 Crude
Preheat Train
Improvement
• Set up, replace and rearrange heat exchangers in CDU-3
to reduce fuel usage
• Improve tray & equipment in CDU-3 to enhance refining
efficiency by increasing Kerosene production and Crude
intake
• CAPEX = 68 M$
• COD = 2Q2014
• COMPLETED Basic Design
Package (BDP) & Front End
Engineering and Design
(FEED)
• EXECUTE Engineering,
Procurement &
Construction (EPC)
(overall progress 43.2%)
-67-
Project Update
Project Detail Progress
Linear Alkyl
Benzene (LAB)
TPX JV with Mitsui
75% : 25%
• Upgrade existing Benzene and Kerosene into
higher valued product; LAB which is an
intermediate feedstock in production of
surfactant
• Capacity: 100 KTA (First Integrated LAB Plant in SEA) • CAPEX = 400 M$
• COD = 2015
• CONSTRUCTION Phase
(overall progress 14.7%)
0
100
200
300
400
500
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Demand Supply (Nameplate Capacity) Deficit
KTA
LAB in SEA market
Demand growth rate 3 % p.a. Net Deficit ; import from NEA
Only 1 Producer in Indonesia; Non integrated
~70% Utilization (capacity 180 KTA)
Demand in Thailand ~65 KTA (net import)
SEA Demand / Supply
Established on
11 Jul 13
KTA %
Feedstock
Kerosene (from TOP) 520 94%
Benzene (from TPX) 33 6%
Product/ By-products
LAB 100 19%
By-products (mostly Kerosene
components) (to TOP)
453 81%
-68-
Project Update
Project Detail Progress
Power Expansion
(2 blocks of SPP)
• Low risk power business enhance income stability
• To support reliability of electricity and steam supply for
TOP Group
• Develop 2 new SPP power plants = 220 MW under a firm
contract with the government
• CAPEX = 380 M$
• COD = 2016
• COMPLETED Front End
Engineering and Design
(FEED)
• EXECUTE Engineering,
Procurement &
Construction (EPC)
(Awarded a contractor)
-69-
Project Update
AEC Member Countries
Market Demand (KTA)
Project Detail Progress
Solvent Expansion
(SAKC)
• To expand solvent capacity to meet the demand growth
in Thailand and the region
• Capacity increase to 141 KTA from 76 KTA
• CAPEX = 60 M$
• COD = 2014
• CONTRUCTION PHASE
(overall progress 85.0%)
Question & Answer
-71-
Thank You
Any queries, please contact:
at email: ir@thaioilgroup.com
Tel: 662-797-2999 / 662-797-2961
Fax: 662-797-2976
Appendices
-73-
Asian Margin Vs. US-EU margin
Source: EIA, Norwegian Energy, Thai Oil
Total Capacity: 4.9 MBD
91.8% 57.1% 71.7%
Total Capacity: 17.7 MBD Total Capacity: 17.0 MBD
$/bbl
SINGAPORE GRM
-74-
Crude Inventory
Source: Norwegian Energy
-75-
Global Distillate Inventory
Source: Norwegian Energy
-76-
Fuel Oil Inventory
Source: Norwegian Energy
-77-
China’s Product Export
Source: Norwegian Energy
-78-
Benchmark Product Yield
Yield
WTI CRK BRT CRK SG DB CRK SG DB
HSK
Reuters Yield Reuters
Adj F&L Reuters
Adj F&L Reuters
Adj F&L
Mogas 47% 25% 31% 10%
Naphtha - - 7% 6%
Jet 25% 25% 18% 17%
GO 11% 23% 16% 16%
FO 13% 18% 22% 46%
LPG 4% 6% 3% 3%
MTBE -2% - - -
TOTAL 98% 97% 97% 98%
-79-
Domestic LPG Demand
LPG Demand by Sector
LPG Demand Highlight
• LPG demand in Q3-13 dropped by 3%YoY
from significant reduction in feedstock
sector
• Government imposed active measures
on gas distributors selling cross
sectional LPG from household sector
to automotive sector.
• So, LGP in household consumption
declined while LPG in automotive
sector rose.
• LPG demand decrased 1% MoM in Oct 13
due to lower consumption in feedstock
sector by 2% MoM and industrial sector by
‐1% MoM, but downside limited by the
growth from cooking sector by 2% MoM.
Outlook 2013
• LPG demand is expected to grow 5% which
is slightly slower than prior year as
government aims to increase retail price in
automotive and household sectors.
Thailand LPG Demand
-80-
Domestic Gasoline Demand
Source : Department of Energy Business, Ministry of Energy
Gasoline Demand by Grade
GASOLINE Demand Highlight
• Gasoline consumption in Q3-13 grew by 8% YoY.
• Mogas demand in Oct 13 rose 4% MoM after
flooding situation was ease. Mogas demand rose
in all grade, where GSH portion increased slightly
to 93% of total Mogas, led by 42% of GSH91,
35% of GSH95, 13% of E20, 8% of UG95 and 2%
of E85
• Thailand's ethanol demand in Oct‐13 reached
2.71 mn litres/day, supported by gasohol usage
expansion of 3.5% MoM. Meanwhile, total
ethanol production was 2.84 mn liters/day. The
majority of feedstock was still molasses (66%,
equivalent to 1.87 mn liters/day)
Outlook 2013
• Gasoline consumption is predicted to robustly
grow by 7% YoY thanks to the recorded new car
sale from 1st car buying program, which was
largely delivered in 1H-13.
Thailand Gasoline Demand
-81-
Domestic Jet Demand
JET Demand Highlight
• Jet consumption in Q3-13 rose by 13%
YoY in line with an increase in number of
flights as well as a rise in tourists.
• Jet consumption in Oct 13 increased by
1% MoM due to higher in aircraft
movements by 4.9% MoM, tourist
numbers by 0.4% MoM, and air freight by
4.6% MoM.
Outlook 2013
• TOP sees jet demand growth to be
around 6% owing to little political risk
and healthy tourism.
Source : Department of Energy Business, Ministry of Energy / AOT
Thailand JET-A1 Demand
JET-A1 demand and # of flights
-82-
Domestic Gasoil Demand
GASOIL Demand Highlight
• Gas oil demand in Q3-13 remain stable compared
to last year from reduction from all sectors.
• Gas oil demand in Oct 13 increased 5% MoM
supported from rising in transportation and
industrial sector after production resumed as
flooding ease, and supported by harvesting season
for agricultural products.
• Outlook 2013
• Gasoil demand is expected to expand 4%YoY
supported by 1st car buying program and capped
retail price at 30B/litre.
Source : Department of Energy Business, Ministry of Energy
NGV Demand Highlight
• NGV in Q3-13 grew robustly by 12%YoY because
of attractive retail price. Though NGV price was
partially floated, it was still the cheapest fuel.
• NGV slightly decreased slightly by 1% MoM in
Oct 13. However, total NGV registered cars
steadily grew by 1% MoM to 385K units in Oct13.
Thailand Gasoil Demand
NGV Demand
Note: Gasoline demand in Sep is based on news on 23 Oct 2013 (unofficial data)
-83-
Domestic Fuel Oil Demand
FUEL OIL Demand Highlight
• FO demand in Q3-13 decreased by
3%YoY mainly from lower usage in
industry sector.
• Fuel Oil demand in Oct 13 dropped by
5% MoM from a decrease usage in
transportation and industry by 9% and
2% respectively.
Outlook 2013
• Fuel oil demand expected to dropped by
-9% YoY as fuel oil prices pressure power
plant users to use other fuels.
Source : Department of Energy Business, Ministry of Energy
Thailand Fuel Oil Demand by Sector
Thailand Fuel Oil Demand
-84-
Thank You
Any queries, please contact:
at email: ir@thaioilgroup.com
Tel: 662-797-2999 / 662-797-2961
Fax: 662-797-2976