BANGKOK (Reuters) - Thailand’s largest energy company PTT Pcl (PTT.BK) said on Monday it planned to cut investment by up to 15% after booking quarterly losses due to a sharp drop in oil prices and weak demand for petrochemicals amid the coronavirus outbreak.
The state-owned firm reported losses of 1.55 billion baht ($48.2 million) in its first quarter ending in March, its first loss in four years, versus a profit of 29.3 billion baht in the same period a year earlier.
Crude oil price fell from $67.3 per barrel at the end of last year to $23.4 per barrel in the first quarter of 2020 from the oil price war and oversupply, PTT said.
Global oil demand has plummeted by about 30% as the coronavirus pandemic curtailed movement across the world, building up inventories globally.
PTT said it would reduce investments in 2020 by 10% to 15%, deferring investments that were not priorities.
Its refining unit, IRPC Pcl (IRPC.BK) last month said it would delay a $1 billion chemical project as demand for petrochemical products had slowed.
PTT in January approved a five-year investment plan of 180.8 billion baht to enhance the group’s gas business and a provisional 203.5 billion baht for liquefied natural gas and gas-to-power project investments.
“There was a decrease in operating profit in refining from stock loss of 35.7 billion baht following a sharp drop in oil prices and petrochemical prices, which directly affects the energy business,” Chief Executive Chansin Treenuchagron said in a statement.
The company’s petrochemical business was affected by a drop in jet fuel demand as airlines grounded flights due to global travel restrictions to curb the spread of the virus.
PTT, however, would reduce jet fuel production and produce diesel fuel where demand has only slightly decreased and expects refineries to have a utilization rate of 90% to 100% for 2020.
The firm expects its oil and gas sales for the year to be 7% lower than its previous projection. Its exploration unit, PTT Exploration and Production Pcl (PTTEP.BK) had a sales target of 388,000 barrels of oil equivalent per day.
“Despite these external factors ... PTT is confident in the organization’s speed in adapting to the effects of the COVID-19 situation and oil price war,” Chansin said, adding that it was managing costs and liquidity efficiently.
Reporting by Chayut Setboonsarng; editing by David Evans