http://www.thaioilgroup.com
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A LEADING FULLY INTEGRATED REFINING & PETROCHEMICAL VISION COMPANY IN ASIA PACIFIC • To be in top quartile on performance and return on investment • To create a high-performance organization that promotes MISSION teamwork, innovation and trust for sustainability • To emphasis good Corporate Governance and commit to Corporate Social Responsibility Excellent Striving Professionalism Vision Focus VALUE Ownership & Commitment Initiative Social Responsibility Integrity Teamwork & Collaboration 3
Corporate Governance Policy Roles and Responsibilities for Stakeholders The board of • Truthfully report company’s situation and future trends to all stakeholders directors, management and all staff equally on a timely manner. shall commit to moral • Shall not exploit the confidential principles, equitable treatment to all information for the benefit of related stakeholders and perform their duties parties or personal gains. for the company’s interest with • Shall not disclose any confidential dedication, integrity, and transparency. information to external parties. CG Channels Corporate Management Office +66-0-2797-2999 Thai Oil Public Company Limited ext. 7312-5 Should you discover any ethical 555/1 Energy Complex Building A wrongdoing that is not 11F, Vibhavadi Rangsit Road, +66-0-2797-2973 compliance to CG policies or any Chatuchak, Bangkok 10900 activity that could harm the Company’s interest, please http://www.thaioilgroup.com cgcoordinate@thaioilgroup.com inform: 4
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Q3 & 9M/10 Highlights 7
Market Condition • GRM continued to recover from higher middle distillate margins, as a result of strong Chinese demand ahead of Asian Games and Asia’s turnaround season. • Aromatics margins weakened as supply glut from China & Middle East and higher feedstock cost following crude price. Currently the margin is in upward trend supported by the bullish PTA/PET market amid the limited supply from Aromatics Oman S/D and Urumqi delay. • Lube base margins remained strong followed economic recovery and a tight supply as a result of Indonesian & Taiwanese lube base plants shut down. Performance Highlights • Refinery utilization at 97%, due to planned maintenance S/D of CUD-1 for 7 days, CCR-1 for 11 days & HCU-1 for catalyst change for 14 days. • Continued to enhance integration amongst group companies to reduce costs & maximize margins. Achieved margin enhancement from processing of unconventional crudes. • Sought opportunities in price (oil & aromatics) and financial risk management - ~ 200 MB in Q3/10 & ~ 410 MB for 9M/10 • Accounting GIM increased to $6.1/bbl, improved 22% QoQ and 65% YoY. • Net profit improved to 2,323 MB, +116% QoQ and 573% YoY. • In Q3/10, FX gain of 1,317 MB was registered as a result of 2.03 Bt/USD appreciation, offsetting the respective reduction of Baht net profit, exemplified our natural hedge principle. 8
Performance Analysis 9
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials + Winter demand kicks off GO LPG (controlled price) (Unit: $/bbl) + Inventories start to drawdown - High stocks to limit GO spike -16.4 -29.2 -31.2 12.4 -40.0 -41.3 11.3 10.9 -45.9 -47.5 -47.8 -48.5 8.9 8.9 7.6 7.0 7.0 6.2 - Seasonal low demand HSFO ULG95 - Higher Refinery run rates -3.0 -3.0 -4.5 -4.8 -4.7 -4.8 -5.3 -5.8 -6.7 12.6 + Winter and bunker demand 10.5 10.2 9.7 9.6 9.4 8.9 - Higher crude prices 8.6 5.1 + Open arbitrage to the West due to weaker Asian prices Market GRM JET and lower freight rates + Higher demand from China ahead of the Asian Games 12.9 11.7 11.2 11.3 9.4 8.6 7.4 3.0 7.3 1.4 2.1 3.1 2.5 3.7 3.8 3.1 7.3 7.3 Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 9M/09 9M/10 Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 9M/09 9M/10 10
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Market GRM Crude Oil Price - Dubai (Unit: $/bbl) + Positive industrial data to support oil demand (Unit: $/bbl) + I EA, EI A, and OPEC revised up global oil demand growth 100 - Concern over global economic recovery 84 $/bbl as of 26 Nov 3.8 1.2 0.7 2.7 2.9 3.7 1.9 3.1 -1.4 77 75 75 74 80 Stock Gain/Loss (Unit: $/bbl) 62 60 6.1 0.8 3.5 0.4 2.0 -0.9 -0.4 -0.1 0.0 Accounting GRM (Unit: $/bbl) 40 3.0 7.3 1.4 2.1 3.1 2.5 3.7 3.8 3.1 20 2009 Q1/10 Q2 Q3 11 Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 9M/09 9M/10
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Spread over Dubai Sources of Crude Spread over Dubai (US$/bbl) (US$/bbl) Others 1 2 2 1% 3% 4% -16.1 -15.2 LPG 7% 9% 4% Far East 14% 14% Platformate 11% Local 9.7 10.2 Gasoline 16% 17% 8.6 11.3 Jet 20% 19% Middle East 88% 79% 7.6 10.9 Diesel 37% 37% 1.mainly ESPO-USSR -4.7 -4.8 FO 11% 10% 2.LPG Market Price – CP Aramco 9M/09 9M/10 9M/ 09 9M/ 09 9M/ 10 • Flexible production by diversifying crude type to seek an opportunity from market for cheaper crude. • Improve lorry loading facilities and Maximize Gasoil products by adjusting production mode to capture domestic price premium and EURO 4 incentive 12
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Domestic Oil Demand / Refinery Intake Domestic Oil Demand 3% (KBD) (KBD) 829 90% 1,400 89% 100% 89% 89% 88% 87% 807 86% 1,200 80% 9M/09 1,000 0% 60% 202 9M/10 138 155 200 164 192 800 221 600 -3% 12% 357 357 40% 400 7% 746 734 732 716 731 711 690 4% 187 20% 170 146 142 200 90 84 53 50 0 0% Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 9M/10 FY/09 LPG Gasoline Jet/Kero Diesel FO Total Demand Domestic Demand/Sales Net Export Source: DOEB, Ministry of Energy. Others Utilization Rate TOP’s Domestic & Export Sales Refinery Intake 13% 278 261 (KBD) 9% 9M/2010 19% 21% 2% Export Sales 43% 13% Domestic Breakdown Domestic Jobbers 81% 79% 16% 5% 13 9M/09 9M/10 Export = 21%
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Aromatics Spot Prices & Margins 2010 %Utilization (US$/Ton) Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 9M/10 Q2 Q3 9M PX-ULG95 384 475 355 321 286 226 218 243 88% 85% 87% BZ-ULG95 -60 79 160 178 215 159 132 169 Paraxylene (PX) 384 412 (US$/Ton) - PX oversupply as new 89 181 1,400 aromatics refinery start up in PX 1,200 BZ China and ME 1,000 MX - Producers cut run due to low 800 price ULG95 600 - In late Q3, polyester demand 400 robust as end-users shift their 200 requirements from cotton Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 TPX’s Production & Product-To-Feed Margin (P2F) TL (Tons/Quarter) Benzene (BZ) BZ 35 46 39 44 29 35 39 20 37 42 34 39 43 0 - Lack of arbitrage opportunity 25 MX 1 1 2 138 123 123 119 105 105 112 to US bring oversupply PX concerns among Asian market Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 Q 1/ 09 Q 2 Q 3 Q 4 Q 1/ 10 Q 2 Q 3 - Loss of BZ demand from SM plant (=85 KT) due to SM plant (US$/Ton) Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 9M/10 in region shutdown P2F -$/ton 157 155 159 154 120 103 91 105 P2F -$/bbl 20.6 20.3 20.9 20.3 15.7 13.4 12.0 13.7 14
Refining Aromatics Lube Base Integrated Margin Performance Breakdown Financials Base Oil & Bitumen Spot Prices & Margins 2010 %Utilization (US$/Ton) Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3/10 9M/10 Q2 Q3 9M 500SN-HSFO 398 268 404 429 435 541 607 528 94% 94% 94% BIT-HSFO 70 -5 -3 -23 27 38 46 37 Lube Base Oil 374 584 (US$/Ton) 10 3 1,600 - High Demand of High Viscosity Grades especially BS 1,200 500SN in NEA /SEA 800 - Supply shortage due to plants BITUMEN outage 400 HSFO - Weaken of Fuel oil price 0 contribute BO margin Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 upwards TLB’s Production & Product-To-Feed Margin (P2F) Bitumen Bitumen (Tons/Quarter) 81 97 82 84 87 85 TDAE/Extr 60 41 36 39 36 38 act/Slack 32 23 - Chinese demand still firm 72 Wax 67 64 64 65 58 53 Base Oil with coming summer season Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3 Q 1/ 09 Q 2 Q 3 Q 4 Q 1/ 10 Q 2 Q 3 and project hanging in Q2 (US$/Ton) Q1/09 Q2 Q3 Q4 Q1/10 Q2 Q3/10 9M/10 P2F -$/ton 97 99 96 126 115 135 149 134 P2F -$/bbl 14.8 15.0 14.5 19.0 17.4 20.6 22.6 20.3 15
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