Bangkok Post – Thaioil unveils 2025 strategy, prioritizes clean fuel project

Mr. Bandhit Thamprajamchit, Chief Executive Officer and President of Thai Oil Public Company Limited, said: “Despite the ongoing instability in the global and Thai economies, there are positive factors that will benefit the energy and refining industry in 2025. Demand for aviation fuel is expected to increase. the growth is driven by a rise in commercial flights, especially in Asia, where tourism continues to grow in the wake of the COVID-19 pandemic. Thaioil has the highest market share in this segment, around 50%. Diesel demand is also projected to increase due to economic growth in Asia. While gasoline demand continues to rise, it may face supply pressure from new refineries coming online next year, potentially leading to some recovery in refining margins in 2025. Overall, this is expected to be a positive for the refining business next year. long-term perspective.”

To address challenges and take advantage of growth opportunities, Thaioil has identified four key strategies for 2025:

• Strengthening the refining business and accelerating the Clean Fuel Project (CFP): Thaioil prioritizes CFP as the key to its long-term success. The company is also introducing new technologies to improve productivity, improve competitiveness and control costs.

CFP achieved its first success with a trial run of a diesel hydrodesulfurization unit (HDS-4), which has been producing Euro 5 diesel since February 2024. This supports government policies to promote cleaner fuels. The USP is currently under construction and the main equipment will be delivered to the site from the end of 2023. The fourth oil refining unit (UPG-4) is developing faster than other parts. Meanwhile, the installation of equipment and connection of pipelines is underway at the residue hydrocracking unit (RHU), which processes fuel oil and asphalt into jet fuel and diesel fuel. Due to its complexity and limited space, progress on this block is slower than on others.

• Expanding the value chain: Thaioil specializes in developing high quality products for various industrial applications to meet changing market needs. This includes collaborating with domestic and international partners to expand distribution channels and penetrate high-potential markets such as Vietnam, Indonesia and India. Of particular note is the expansion of the chemicals business into disinfectants and surfactants (D+S), which plays a significant role in the fast-growing cleaning and infection control market. As part of the “TOP for the Great Future” initiative, Thaioil, together with PTT Group and other partners, is exploring new business areas such as biosurfactants, blue/green hydrogen, biojet fuels, and carbon capture, utilization and storage (CCUS) technologies. . ).

• Financial Strength: Thaioil prioritizes effective cost and expense management, as well as reasonable raw material prices and foreign exchange risk management. This approach aims to maintain financial liquidity and investment-grade credit ratings, bolstering investor confidence.

• Commitment to Sustainability: Thaioil is committed to sustainable business practices, taking into account environmental, social and governance (ESG) factors. The company is focused on improving energy efficiency to reduce greenhouse gas emissions and creating value for society and communities through various projects such as promoting education, creating jobs and access to healthcare in remote areas.

“We are confident that these four strategies will enable Thaioil to overcome challenges and achieve sustainable long-term growth, delivering commensurate returns to shareholders and ensuring Thailand’s energy security,” Mr. Bandhit added.

However, Thaioil is concerned about the current situation with UJV’s subcontractors – Samsung E&A (Thailand) Co., Ltd. (Samsung), Petrofac South East Asia Pte. Ltd. (Petrofac) and Saipem Singapore Pte. LLC (Saipem). These subcontractors have jointly decided to stop construction of the USP unless UJV – Samsung, Petrofac and Saipem pay all outstanding payments. Thaioil is aware of the difficulties faced by subcontractors who are not receiving salaries and has been continuously sending out letters calling on UJV – Samsung, Petrofac and Saipem and their parent companies to pay overdue amounts in accordance with the terms of the subcontractors.

The breach of contract by UJV – Samsung, Petrofac and Saipem – affected both Thaioil and subcontractors. Accelerating CFP management remains a top priority for Thaioil. The company is closely monitoring the situation, assessing the impact on project timelines, costs and the business ecosystem, and is also implementing measures to minimize damage. Thaioil is also preparing appropriate actions to expedite the completion of the CFP, while keeping the interests of the company and its shareholders as a top priority.

Clarity on this issue is currently expected in early 2025. Although late payment claims from subcontractors from UJV – Samsung, Petrofac and Saipem – have delayed progress, the start of commercial operations under the CFP will not be delayed indefinitely.

Despite these obstacles, Thaioil remains committed to completing the CFP as quickly as possible to enhance competitiveness, create added business value and strengthen Thailand’s long-term energy security and economic development.