SET-listed oil and gas drilling firm PTT Exploration and Production Plc (PTTEP) is in talks with US-based Murphy Oil Corporation to buy more exploration and production (E&P) resources in Brunei and Vietnam.
The plans surfaced after PTTEP acquired Murphy Oil's business in Malaysia worth US$2.13 billion, according to PTTEP's letter to the Stock Exchange of Thailand on Thursday.
The two companies signed a share sale and purchase agreement in Kuala Lumpur to acquire two subsidiaries, Murphy Sarawak Oil Co and Murphy Sabah Oil Co, covering five petroleum E&P projects.
PTTEP president and chief executive Phongsthorn Thavisin said the new plans for Brunei and Vietnam are expected to start in May, with both projects in the exploration process.
According to its website, Murphy Oil has entered into two production-sharing agreements: one for properties in offshore Brunei in late 2010 and another with Vietnam National Oil and Gas Group and PetroVietnam Exploration Production Co in November 2012.
Murphy Oil works four petroleum blocks in Vietnam.
Mr Phongsthorn said the acquisition of Murphy Oil is expected to be completed by June.
"We will benefit from five E&P projects in Sabah and Sarawak, as well as 600 staff in Malaysia, matching our overseas direction," he said.
PTTEP will start drilling in Myanmar's MD7 and MD11 petroleum blocks this year, Mr Phongsthorn said.
The Murphy Oil deal is expected to extend PTTEP's oil and gas reserve life to six years, up from five now.
Sales volume in 2019 will increase 15% to 344,000 barrels of oil equivalent per day from 320,000 this year, Mr Phongsthorn said.
PTTEP plans to earmark a further $300-400 million a year for its Malaysia projects to maintain gas production and expansion capacity in the long run.
Mr Phongsthorn said the $2.13-billion deal will be funded by PTTEP's cash on hand, now at $4 billion.
"If there are other acquisition deals, PTTEP has the capability to raise another $4 billion, so any expansion plans are unlikely to impact cash flow," he said.
In addition, PTTEP is looking to expand and seeking new acquisition deals, mainly in Asia. It will focus on existing projects in North America and Mexico after global oil prices resume stable movement.
In related news, parent firm PTT yesterday laid the foundation stone for its petroleum terminal wharf and supply station for liquefied natural gas (LNG) in Nong Fab, Rayong.
The project, worth 38.5 billion baht, will support LNG imports of 7.5 million tonnes a year. PTT aims to complete the project by 2022.
PTT runs the LNG receiving terminal in Map Ta Phut, Rayong with a capacity of 11.5 million tonnes a year. The two LNG facilities will have a capacity of 19 million tonnes by 2022.
