Thai Oil Public Company Limited 1 Thai Oil Public Company Limited Presentation to Investors Presentation to Investors Thai Corporate Day Thai Corporate Day Arranged by ABN AMRO Bank Arranged by ABN AMRO Bank 20-23 March 2006 20-23 March 2006
Vision, Mission and Strategy Vision, Mission and Strategy 2 Mission Vision � To be PTT’s flagship refinery through optimized Thaioil seeks to be one of the leading fully management of the group’s refining portfolio integrated refining and petrochemical � To expand facilities to better meet domestic demand companies in the region recognized for our growth sustainable growth, optimum stakeholder � To enhance the competitive advantage of our power value, and commitment to environmental and generation operations to further solidify the core refining business social well-being � To create a high-performance organization that promotes teamwork, innovation and trust Strategy Increase Remain primarily a participation in “pure play” refiner power generation Integrate and Expand refining expand capacity to capture petrochemical future domestic business growth Continue to enhance refining margins and rationalize costs
3 Presentation Outline I) Business Overview & Update II) Favorable Industry & Investment Projects III) Financial Highlights IV) Conclusion
I) Business Overview & Update
Thaioil Group 5 Petrochem/ Power Transportation Refinery Lube Base Oil PTT 26% JPOWER 19% Thaioil 9% 100% 55% 100% 100% (TOP) Thai Paraxylene Thaioil Power Thai Lube Base Thaioil Marine Thappline (TPX) (TP) (TLB) (TM) Capacity: Current: 220 Kbd Capacity: 3-on-1 Combined A fleet of 5 oil & Multi-product Capacity: Mid 07: 270 Kbd cycle petrochemical Pipeline Current: 348 Kt/y (PX) Lube Base oil: vessels with int’l Electricity 118 MW Mid 07: 853 Kt/y total Capacity: 26,000 classifications 270 Kt/y Steam 168 T/hr mn Litres/Y. Total capacity: TOP Info: 408 Kt/y (PX) approx 30,000 DWT Utility Supply to # of shares: 2,040 mn 160 Kt/y (Bz) Group Mkt Cap: ~US$ 3.3bn* 136 Kt/y (To) MktCap Ranking:10 th * 149 Kt/y (MX) Independent * As of 14 Mar 06 56% Power (Thailand) (IPT) Shareholder structure PTT 20% PTT 49.54% 2-on-1 Gas-fired, Free float 43.28% Combined cycle Thaioil 24% Others 7.18% Electricity 700 MW Core Refining Related Business & Value Enhancement Product Marketing Support Operations Income Stability
Accomplishment in 2005 6 Business/Operational � TOP - Maintenance shutdown of CDU-3 in Q1 enhanced plant efficiency by 10% and, thereby, allowed a continuous utilization at 104% in 2005. - An acquisition of 24% in IPT was completed in Mar’05 from Unocal for US$ 12.75 mn. (equivalent to US$ 76,000/MW) � TPX - Change of catalyst in Jan’05 increased PX production by 20% (+60,000 tons/yr). � IPT - Completion of CT-2 replacement, consequently, allowed a full 700 MW run as from Jun’05. � Turnaround of performance of all subsidiaries post-acquisition resulted in a significant contribution to the Group’s earnings in 2005. � All approved investment projects, e.g. CDU-3 revamp, SBM, etc., progress as planned. Finance � TOP - Prepayment of US$ 100 mn. in Mar’05, thereby reducing interest cost by US$ 5 mn. p.a. - Tremendously success in completely refinancing its debt in Jun’05. Benefits Post-Refinancing (2005) � Interest saving of US$ 7 mn. p.a. � 10-year Euro Bond -US$ 350 mn. � Diversify sources of fund -Baa1 (Moody’s)/BBB (S&P) � Better debt profile (longer tenor, more US$, -Low US Treasury benchmark @ 3.9% p.a. -5 times oversubscribed fixed/floating rate) � 7-year Term Loan (Onshore) � More lenient covenants and removal of investment -Bt. 2,600 mn. & US$ 65 mn. restrictions � 5-year Revolving (offshore) -US$ 200 mn.
Accomplishment in 2005 (cont.) 7 Finance (cont.) � IPT - Successfully negotiated with creditors in Nov’05 to lower its onshore interest rate, which translated into US$ 3.4 mn. saving over the remaining loan life. � TPX - Also successfully negotiated with creditors to restructure its loans. Signing expected by Mar’06. Recognitions � Best Newly Listed Company in Asia and Most Improved Companies in Asia for the Year 2005 from Euromoney Magazine � Best Newly Listed Company in Thailand for the Year 2004 from the Stock Exchange of Thailand � Reliability Award for the Year 2004 from Shell Global Solutions International � Best in Energy Conservation (Refineries & Chemical) for the Year 2005 from the Ministry of Energy
Continued Tight Domestic Oil Demand/Supply in 2005 8 Oil Production by Refinery 1) Domestic Oil Demand/Refinery Intake Kbd 90% 90% 89% Kbd 1200 90% 87% 85% 84% 215 85% 925 920 1000 903 911 862 867 (Intake) 80% 88 82 145 800 83 92 120 120 75% 101 600 70% 59 65% 400 764 765 738 10 731 712 717 60% 200 Total 55% TOP Ess o RRC SPRC TPI BCP RPC Country 0 50% Q1/05 Q2/05 Q3/05 Q4/05 2005 2004 Intake (kbd) 914 230* 153 139 139 178 63 12 Oil Demand Feed for Petrochem Utilizaton 87% 104% 90% 92% 92% 83% 53% 60% Net Export % Utilization rate (RHS) Oil Demand by Products Volume (Kbd) � Oil demand for 2005 was approx. 738 kbd, higher than last year by 1%. 2005 2004 +/(-) � Domestic demand in H2/05 was reduced, compared with LPG 93 83 +12% H1/05 due to rainy season, flooding and the impact of diesel Gasoline 125 132 (5%) subsidy removal in Jun’05. 412 412 - Middle Distillate � While supply remained tight, local refineries’ utilization rate -Diesel was 87% in 2005 down from 89% in 2004, reflecting major 337 337 - turnaround of RRC/SPRC in Oct 05. -Jet Fuel 75 75 - Remark: 1) Exclude feedstock for petrochemical plant Fuel Oil 108 105 +4% Source: Ministry of Energy and Company
Improved Utilization in 2005 9 % YoY 120% 104% 104% 97% 92% 100% 92% 91% 82% 79% 77% 77% 80% 71% 2004 60% 2005 41% 40% 20% 0% Refinery TPX TLB IPT TP TM Refinery’s intake remained at 104% of capacity due to strong requirement from offtakers and high plant efficiency. � TPX’s utilization improved to 97% (+18 %), following a change in catalyst in Q1/05 which increased PX production by 20%. � TLB’s utilization decreased to 71% due to shutdown in Q1/05. � IPT’s availability rose to 77% after CT-1 resumed the full 700 MW since Jun’05. � TM’s utilization rose to 92% in 2005 due to more effective fleet management, disposal of 2 vessels, coupled with high � demand in chemical and oil transportation.
Flexible Configuration Allows for Complex Margin Optimization 10 Thaioil’s Crude Mix and Oil Product Yield � With multiple cracking and treating facilities, Thaioil Crude Product Domestic Demand has flexibility to select most economical crude 14% capitalizing on the favorable sweet and sour 19% Others 29% 30% Light 6% 33% differential to optimize refinery operation. 6% Far East Distillate � 2005 Average Oil Prices-MOPS (US$/bbl) 54% Tapis Tapis Dubai Dubai TP TP-DB DB ULG 95 ULG 95 Jet Jet Diesel 0.5% Diesel 0.5% Fuel Oil Fuel Oil Middle 80% 60% 56% Middle 75% East 57.89 57.89 49.32 49.32 8.57 8.57 62.09 62.09 67.63 67.63 64.03 64.03 40.31 40.31 Heavy 17% 11% 10% � Up to 80% of crude from Middle East (whose prices 2005 2004 2005 are more attractive than Far East sweet grade) are normally processed. US$/bbl Tapis 60 Dubai 50 � Middle distillate was produced to meet local demand 40 (represents about 54% of country's demand). 30 4 M M J S N 5 M M J S N 0 0 0 ' J 2 J
Excellent Relationships with Customers 11 2005 � Sales to major oil companies (PTT, Shell and Caltex) Shell/Caltex, Export, 14% 14% Domestic increased by 4% due to growing retail market shares Independent, 15% at the expenses of sales to independent customers. BCP � Sales to TPX also rose to 11% caused by an increase 4% in volume of platformate sales after sales of MX unit to TPX in Q2/05. TPX 11% � Since domestic demand became weaker from rainy PTT, 49% Including 7% export of PTT season and high oil price in Q3/05, Thaioil switched to focus on exporting more jet fuel at the expense of Total Sales 14,351 Mn. L/year (+ 9%) diesel due to its more favorable price. Shell/Caltex, Export, 12% 2004 � In conclusion, total sales rose by 9% 13% in 2005. Domestic (Domestic:Export = 86:14) Independent, 21% Thaioil’s Export Sales (Mn. L) Q1 Q2 Q3 Q4 FY 288 371 700 681 2,040 2005 BCP 6% (10%) (10%) (18%) (18%) (14%) 308 398 331 556 1,594 TPX 2004 PTT, 46% 3% Including 1% export of PTT (9%) (12%) (11%) (16%) (12%) Total Sales 13,182 Mn. L/year
12 II) Favorable Industry & Investment Projects
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