012 (3&)$4 (26&78)
Transcript of 012 (3&)$4 (26&78)
Opportunity Day • March 7, 2008
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““ Running to be a complex refinery Running to be a complex refinery ””
!"#$% &'(&)*,-!./012 (3&)$4 (26&78)
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DisclaimerThe information contained herein is being furnished on a confidential basis for
discussion purposes only and only for the use of the recipient, and may be subject
to completion or amendment through the delivery of additional documentation.
Except as otherwise provided herein, this document does not constitute an offer to
sell or purchase any security or engage in any transaction. The information
contained herein has been obtained from sources that The Bangchak Petroleum
Public Company Limited (“BCP”) considers to be reliable; however, BCP makes no
representation as to, and accepts no responsibility or liability for, the accuracy or
completeness of the information contained herein. Any projections, valuations and
statistical analyses contained herein have been provided to assist the recipient in
the evaluation of the matters described herein; such projections, valuations and
analyses may be based on subjective assessments and assumptions and may
utilize one among alternative methodologies that produce differing results;
accordingly, such projections, valuations and statistical analyses are not to be
viewed as facts and should not be relied upon as an accurate representation of
future events. The recipient should make an independent evaluation and judgment
with respect to the matters contained herein.
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Performance FY2007
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Contents
►Refinery Business
► Marketing
Product Quality Improvement (PQI) & Related Project
2008 : Another Year of Challenging
PerformancePerformance
FY2007FY2007
USD/Bbl
Singapore’s Oil Price Movement
Y2007
Y2006
Dubai 95/Dubai
GO/Dubai FO/Dubai
USD/Bbl USD/Bbl
USD/Bbl
-
10
20
30
40
50
60
70
80
90
100
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
-
5
10
15
20
25
30
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
-
5
10
15
20
25
30
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
(25)
(20)
(15)
(10)
(5)
-
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Refinery : Performance is in Better Shape$/Bbl YTD,07 YTD,06
95/DB 14.55 11.74
GO/DB 16.72 15.22
FO/DB (10.40) (12.69)
Q4Q4 YTDYTD
2007 2006 2007 2006
M.Baht $/BBL M.Baht $/BBL M.Baht $/BBL M.Baht $/BBL
EBITDA +1,507 (906) +3,768 +1,141
� Base GRM 989 3.88 69 0.33 3,033 3.13 1,877 2.01
� Improvement Programs - 0.00 41 0.19 15 0.02 295 0.32
� GRM Hedging (117) (0.46) (6) (0.03) 47 0.04 681 0.73
� Inventory Gain / (Loss) 1,027 4.03 (1,048) (4.98) 1,803 1.85 (655) (0.70)
� Inventory Write Down - - 295 1.40 54 0.06 (55) (0.06)
Total GRM 1,899 7.46 (649) (3.09) 4,952 5.10 2,143 2.29
� Other Income 9 0.04 16 0.08 128 0.13 42 0.04
� Expenses (401) (1.57) (273) (1.30) (1,312) (1.35) (1,044) (1.12)
� Adjusted EBITDA +480 (153) +1,911 +1,851
Crude Run (KBD) 68 45 66 56
Net Sale (KBD) 81 62 77 67
3.42 0.50 3.19 3.05
(2)
(1)
1
2
3
4
Jan Apr Jul Oct
60
70
80
90
100
110
120
Marketing : MKM Squeezed in 2007GasoilGasoil Price & MKMPrice & MKMGasoilPrice
HSD
MaketingMargin
U$/Bbl
Baht/Liter
2007 2006
2007 2006
(2)
(1)
1
2
3
4
Jan Apr Jul Oct
50
60
70
80
90
100
110
Marketing : MKM Squeezed in 2007
2007 2006
2007 2006
UNL95UNL95 Price & MKMPrice & MKMUNL95l Price
ULG95
MaketingMargin
U$/Bbl
Baht/Liter
0
5
10
15
20
25
30
35
40
45
50
55
0
100
200
300
400
500
600
700
800
Highlight of Marketing Achievement in 2007
1st rank market share of Biodiesel B5
Ref : Channel service station for Year 2007
Increase Biodiesel B5 outlet
from 200 stations in 2006 to be 700 stations in 2007
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2006 2007
Vol, M.liter/Month (Bar) No. Stations (Line)
BCP
76.8%
PTT
23.1%
0
2
4
6
8
10
12
14
16
18
20
22
24
0
50
100
150
200
250
300
350
400
450
500
Increase Gasohol 91 outlet
from 250 stations in 2006 to be 500 stations in 2007
Vol, M.liter/Month (Bar) No. Stations (Line)
Total sale in Retails increase 5.2%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2006 2007
1,000
1,500
2,000
2,500
1st Qtr 2nd Qtr1,000
1,050
1,100
1,150
1,200
Total Sale
No. ofServiceStation
20072006
Vol, M.liter (Bar) No. Stations (Line)
Marketing : MKM Squeezed in 2007
M.Baht St./L. M.Baht St./L. M.Baht St./L. M.Baht St./L.
EBITDA (209) +193 +209 +472
� Retail Margin -34 -6 305 61 509 24 682 33
� Industrial Margin 66 34 104 44 274 32 460 50
� Lube Margin 34 949 13 433 115 826 66 559
Total MKM 66 9 422 57 898 30 1,208 41
� Other Income 132 17 103 14 500 17 435 15
� Operating Expenses (407) (54) (332) (45) (1,189) (40) (1,170) (40)
� Sale Volume KBD ML/MO KBD ML/MO KBD ML/MO KBD ML/MO
- Retail Vol. 39 189 35 171 37 179 35 170- Industrial Vol. 13 64 16 77 15 72 16 78
Total 52 254 51 248 52 250 51 248
4 55 26 39
Q4Q4 YTDYTD
2007 2006 2007 2006
32.6 %32.6 %
16.0 %17.3 %
12.7 %12.7 %
8.4 %8.4 %
OthersOthers
13.0 %13.0 %
34.3 %34.3 %
15.4 %16.9 %
12.1 %12.1 %
8.3 %8.3 %
OthersOthers
13.0 %13.0 %
Y2006
Source : DOEB, MOE
6% Market Share increasing in Service Station
4th RankY2007
EBITDA 1,298 (712) 3,977 1,613
� Depreciation & Amortization (204) (211) (819) (822)
� Net Interest Expense (121) (122) (462) (573)
� FX-Other Gain (Loss) (21) 39 (74) (81)
� Impairment Adjustment (41) 3 (41) 4
� � � � Profit / (Loss) before Tax 911 (1,003) 2,581 141
� Tax (510) 335 (890) 107
Net Profit (Loss) 401 (669) 1,691 248
- -
- INVENTORY GAIN / (LOSS) 1,027 (1,048) 1,803 (655)
- INVENTORY WRITE DOWN - 295 54 (54)
Adjusted EBITDA 271 41 2,120 2,323
Company Performance FY2007
: Million Baht
*
* Included tax reversion from year 2006 Baht 102 million to suspense for RD’s verdict
Q4Q4 YTDYTD
2007 2006 2007 2006
PQI &PQI &
Related Project Related Project
USD/bbl
10
8
6
4
2
0
Product Quality Improvement Project (“PQI”)
What is PQI ?What is PQI ? Result from PQIResult from PQI
CounterpartiesCounterparties
• PQI is the Investment in “Hydrocracking Unit” and other
supporting units
• These units enable BCP to turn current fuel oil output to
be gas oil without increasing the capacity
• Feasibility Study UOP LLC & Foster Wheeler Corporation
• Technology License UOP LLC• EPC Contractor CTCI Corporation• Project Mgnt Consultant Foster Wheeler Corporation
• Investment Cost USD 378 million (Included Contingency 30 MUSD)
• Construction Period May’06 - Year end 2008
Investment & ConstructionInvestment & Construction
MEME FEFEMEME FEFE
CurrentSimple Refinery
AfterPQI Completion
EnhanceEnhance
Crude MixCrude Mix
FlexibilityFlexibility
Less FOLess FO
OutputOutput
PortionPortion
SurgeSurge
GRMGRM
CurrentSpread
CurrentSpread
Feasibility
Spread
LPG, 3%
Diesel,
35%ULG, 18%
Jet Fuel,
11%
Fuel Oil,
33%
LPG, 5%
Diesel,
52%
ULG, 25%
Jet Fuel,
9%
Fuel Oil,
9%
IncreaseIncrease
Crude Crude
RunRun
~ 70 KBD (58%) ~ 100 KBD (83%)
-
2,000
4,000
6,000
8,000
10,000
12,0002003
2004
2005
2006
2007
2008F
2009F
2010F
2011F
THB mil
-
2
4
6
8
10
12
USD/bblEBITDA
EBITDA (feasibility study)
GRM
GRM (feasibility study)
“Return from investment competitive in long-term, hence BCP decided to pursue PQI”
Note: (1) EBITDA 2008F-
2011F based on GO/DB
USD15.21/bbl and
FO/DB USD -12.00/bbl
(2) EBITDA (feasibility
study) 2008F-2011F
based on GO/DB USD10.5/bbl and
FO/DB USD -3/bbl
Both cases based on
gradually growing crude run from 65 KBSD
before COD after that
run max 100 KBSD
(1)
(2)
Note : Not included inventory effect
Prosperous Return from PQI
0
10
20
30
40
50
60
70
80
90
100
110
Project Month & Accumulate %
Progress %
Actual 1.0 2.5 3.0 5.6 8.0 8.7 9.7 11.2 15.0 18.5 20.9 23.4 30.2 34.1 39.6 44.3 50.8 55.5 61.4 68.2 73.5
Plan 61.4 65.5 70.3 78.8 85.7 90.1 93.2 96.3 97.5 98.1 98.6 99.3 99.9 100.0
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
All LLIs delivery
to siteReady for piling
and civil work
Piping and Instrument
Diagram for
construction
Start of Distributed Control
System factory acceptance test Substation Power
no.5 energizedMechanical
Completion
Provisional
Acceptance
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Month
Q4
2006 2007 2008
PQI Progress (E/P/C)
Cogeneration Power Plant
� Stability of Electricity�s Plant System is increased
� Increase efficiency of public utility system using energy
� Save money of building reserve boiler about 2.1 M$
� Expense decreasing from producing and buying
electricity and stream
BenefitBenefit
� Since PQI Project will has done, electricity and
steam demand will be increased.
about 1,000 square metersSpace
Q2- 2009COD
90 tons per hourSteam Capacity
After 25 years then transfer ownership to BCPOperate Period
Vary to CPI and GPI,CPI = Consumer Price IndexGPI = Gas Price Index
Steam Price
MEA minusElectricity Price
19.7 MWElectricity Capacity
HOA SummaryHOA Summary
� More than 300 MBt/year saving from the Cogeneration
Project
� Another 250 MBt./year saving from using natural gas
instead of fuel oil for plant fuel
SavingSaving
2008 : 2008 :
Another YearAnother Year
of Challenging of Challenging
We Concern
• PQI Focusing
• Normal Operation
�Oil Price Situation
�Export Market
�Crude Selection
�GRM
�FX Appreciation
�Marketing Margin Squeeze
�Marketing Market Share
PQI Focusing
ConstructionConstruction
• LP Testing
• Crude Planning
• Tank/Barge Facilities
• Plant Reliability
• Recruitment
• Training
• Working Capital
CommissioningCommissioning
DistributionDistribution
30% Offtake
AgreementbyPTT
Production (KBD) 100100
60% Throughour
ExistingChannel
10% AnotherChannel
&Use / Loss
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
125GO 0.5%S
UNL 95
Dubai
?
$/BBL
J F M A M J J A S O N D J F M A M J J A S O N D’07 ‘08
* Based on Morgan Stanley, Mitsui & Lehman forward price as of Mar. 3 ‘08 Except Mar. ‘08 Price is actual month to date (1-3).
95.07
119.28
110.28
how is the 2008 oil price
Oil Price Situation
2008 Oil Price Trend Analysis
NEGATIVE FACTORSPOSITIVE FACTORS
• World Oil Demand
• World Oil Supply
• New / Expanded Refineries
• Speculator / Hedge Fund
• Weak US. Currency (Currency Impact on OPEC Basket Price)
• Economic (Slowdown esp. USA. From Sub-prime Mortgages)
• High level of inventory (esp. USA)
• Political Tension
• Storms / Weather
WTI Brent Dubai
Barclays Capital 87.40 85.80 81.40
BNP Paribas 88.80 87.00 82.80
Citigroup 80.00 80.00 74.00
Deutsche Bank 80.00 80.00 74.00
EIA 84.73 - 78.73
Economist Intelligence Unit 79.56 78.00 73.56
ESAI 78.90 78.10 72.90
Goldman Sachs 95.48 93.98 89.48
ING 76.00 74.00 70.00
JP Morgan 65.00 64.00 59.00
Lehman 84.00 84.00 78.00
Merrill Lynch 82.00 82.00 76.00
Morgan Stanley 65.00 64.00 59.00
SG CIB 80.90 80.40 74.90
Standard Chartered 75.00 74.00 69.00
UBS 74.00 74.00 68.00
2008
2008 Crude Oil Price Forecast Summary
Source : Analyst Team as of Jan. 2008.
2008WTI = 89-93Brent = 87-91Dubai = 82-86
$/BBL
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
120
125GO 0.5%S
UNL 95
Dubai
$/BBL
J F M A M J J A S O N D J F M A M J J A S O N D’07 ‘08
* Based on Morgan Stanley, Mitsui & Lehman forward price as of Mar. 3 ‘08 Except Mar. ‘08 Price is actual month to date (1-3).
95.07
119.28
110.28
2008 Product Crack Spread Forecast
AVG. 2007DB = 68.3395 = 82.82GO = 84.96
Dubai Price = 82 - 86
UNL 95 Crack= 12 - 14
G.O. 0.5%S Crack = 16 - 18