Market Survey TH O&G
Market Survey TH O&G
Market Survey TH O&G
WWW.MARKETLINE.COM
MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT
AND IS NOT TO BE PHOTOCOPIED
1. Executive Summary
Industry Profiles
TABLE OF CONTENTS
1. Executive Summary 2
2. Market Overview 8
3. Market Data 12
4. Market Segmentation 14
5. Market Outlook 16
Industry Profiles
7. Competitive Landscape 34
7.3. What is the rationale for the recent M&A activity? ...................................................................... 35
8. Company Profiles 36
9. Macroeconomic Indicators 53
Appendix 55
Methodology............................................................................................................................................. 55
Industry Profiles
LIST OF TABLES
Table 1: Thailand oil & gas market value: $ billion, 2015–19 12
Table 2: Thailand oil & gas market volume: million BoE, 2015–19 13
Table 3: Thailand oil & gas market category segmentation: $ billion, 2019 14
Table 4: Thailand oil & gas market geography segmentation: $ billion, 2019 15
Table 5: Thailand oil & gas market value forecast: $ billion, 2019–24 16
Table 6: Thailand oil & gas market volume forecast: million BoE, 2019–24 17
Industry Profiles
LIST OF FIGURES
Figure 1: Thailand oil & gas market value: $ billion, 2015–19 12
Figure 2: Thailand oil & gas market volume: million BoE, 2015–19 13
Figure 3: Thailand oil & gas market category segmentation: % share, by value, 2019 14
Figure 4: Thailand oil & gas market geography segmentation: % share, by value, 2019 15
Figure 5: Thailand oil & gas market value forecast: $ billion, 2019–24 16
Figure 6: Thailand oil & gas market volume forecast: million BoE, 2019–24 17
Figure 7: Forces driving competition in the oil & gas market in Thailand, 2019 18
Figure 8: Drivers of buyer power in the oil & gas market in Thailand, 2019 20
Figure 9: Drivers of supplier power in the oil & gas market in Thailand, 2019 22
Figure 10: Factors influencing the likelihood of new entrants in the oil & gas market in Thailand, 2019 25
Figure 11: Factors influencing the threat of substitutes in the oil & gas market in Thailand, 2019 28
Figure 12: Drivers of degree of rivalry in the oil & gas market in Thailand, 2019 30
Industry Profiles
2. Market Overview
Industry Profiles
The average price of Brent, WTI, and Dubai crude oils declined by 10.2% on average in 2019. In detail, the price of
Brent crude oil, the international benchmark, was $64 per barrel in 2019, almost $7 per barrel lower than its 2018
average. The West Texas Intermediate (WTI) crude oil, the US benchmark, had an average price of $57 per barrel in
2019, nearly $8 lower than in 2018, while the price of Dubai crude oil averaged $63.2, $6 per barrel lower than in
2018.
The price of crude oil began to drop in late 2018 as a result of the strong increase of US shale oil production and a
simultaneous increase in production of oil from other non-OPEC countries, while global demand remained weak. In
fact, production increases limited any upward price movements caused by increased uncertainty over oil supplies in
large oil-producing countries amid geopolitical tensions, including the missile attack on Saudi Arabian refineries in
September 2019, US sanctions on oil trade from Iran and Venezuela, and the decline of oil production in Libya due to
the ongoing civil war in the country.
Natural gas prices were down by 25.4% on average in 2019, the lowest average price since 2016, according to the
World Bank’s index, including natural gas from the US and Europe and liquefied natural gas (LNG) bought from Japan.
The price of US natural gas was down by 18.4%, based on Henry Hub spot prices, averaging $2.56 per million British
thermal units (MMBtu). The price of European natural gas recorded the biggest slump, down by 37.5% in 2019, at $4.8
(MMBtu), while the price of LNG bought from Japan was down only by 1% at 10.57 (MMBtu). Strong growth in natural
gas production, linked to the growth of oil production, suppressed prices in 2019 as supply exceeded demand.
Especially, the supply of natural gas through LNG exports surged that year.
The Thai oil and gas market had total revenues of $28.5bn in 2019, representing a compound annual growth rate
(CAGR) of 2.1% between 2015 and 2019. In comparison, the Indonesian and Chinese markets grew with CAGRs of
5.4% and 10.4% respectively, over the same period, to reach respective values of $34.1bn and $282.2bn in 2019.
Oil prices have fluctuated significantly in recent years. In response to growing US shale oil production, OPEC countries
increased supply as well to protect their shares, with prices dropping sharply from $96.2 in 2014 to $50.75 per barrel
in 2015, and even lower to $42.8 in 2016. However, lower oil prices meant that the oil income of OPEC countries
suffered, thus OPEC sought a turnaround. For this reason, an additional group of countries led by Russia, OPEC+, was
invited to join OPEC’s efforts in 2016, in order to increase leverage in terms of fixing production quotas. In September
2016, OPEC and OPEC+ countries agreed to reduce their production collectively by 1.8 million barrels a day, starting
from the first half of 2017, later extending these cuts for the rest of the year. As a result, oil prices increased by 23.4%
in 2017 to $52.8 per barrel. This production cut agreement was extended into 2018, with prices increasing by 29.5% in
that year to $68.35 per barrel. For 2019, the alliance decided to take a further 1.2 million barrels per day off the
market amid concerns over weak global demand, while the production of US shale oil continued to increase. However,
OPEC’s decisions did not prevent oil prices from falling, as the growth of production from non-OPEC countries not only
balanced out supply cuts from OPEC countries, but also led to a growth in global supply that suppressed prices as
global demand remained weak.
Natural gas prices have followed a similar pattern – as natural gas is often a by-product of oil extraction – in fact, oil
and gas prices have been almost perfectly correlated over the last six years. The production of natural gas has been
growing since 2009, with increasing drilling activity and growth in capacity of LNG terminals eventually causing a
supply gut that has suppressed prices.
What is more, the industry has been globally affected by rising environmental concerns over carbon emissions.
Tougher emission targets set by countries in the 2016 Paris Agreement, along with consumers’ increasing efforts
towards energy efficiency and the adoption of sustainable energy sources, mean that the oil and gas industry has lost
momentum.
Market consumption volume increased with a CAGR of 0.1% between 2015 and 2019, to reach a total of 772.3 million
BoE in 2019. The market's volume is expected to fall to 761.8 million BoE by the end of 2024, representing a
compound annual rate of change (CARC) of -0.3% for the 2019-2024 period.
Consumption in the Thai market increased by 2.2% in 2019, recovering from an earlier decline in 2018, with demand
stimulated by lower oil and gas prices. The consumption of refined oil products remained flat, but the consumption of
natural gas was up by 5.5% in 2019, supported by the growth of industrial output and domestic gas production.
The refined petroleum products segment was the market's most lucrative in 2019, with total revenues of $24.1bn,
equivalent to 84.5% of the market's overall value. The natural gas segment contributed revenues of $4.4bn in 2019,
equating to 15.5% of the market's aggregate value.
Industry Profiles
Refined petroleum products account for the largest share of consumption as refined oil products are widely used as
vehicle fuels, unlike natural gas which is mainly used in electricity generation and heating. Approximately half of gas
consumption in this market comes from industrial demand, while demand for fuel for transportation activities
accounts for nearly half of the consumption of refined oil products. Regarding refined petroleum products, diesel,
mainly used in commercial transportation, accounted for nearly 36% of the segment’s total volume, with gasoline, the
second-most lucrative product, making up nearly 17% of the segment’s volume, according to data from the Joint
Organisations Data Initiative (JODI).
The performance of the market is forecast to decline, with an anticipated CARC of -1.5% for the five-year period 2019
- 2024, which is expected to drive the market to a value of $26.4bn by the end of 2024. Comparatively, the Indonesian
and Chinese markets will decline with CARCs of -1.8% and -1.3% respectively, over the same period, to reach
respective values of $31.1bn and $264.6bn in 2024.
The market is expected to decline sharply in 2020 as a result of the COVID-19 pandemic,
hit by a combination of negative-demand shock and a supply glut. The sharp drop in demand, due to the pandemic
containment measures, was the most significant factor driving the collapse in oil prices in early 2020.
In detail, demand for gasoline and jet fuel oil in road transportation and aviation, respectively, declined dramatically in
early 2020 due to lockdown measures, and is set to remain limited as long as these measures apply. Demand for
diesel and marine fuel, which are primarily used in trucks and ships for the transportation of goods, has also been
affected, but that impact has been less acute. Containment measures are having a less direct impact on demand for
gas through electricity generation, as electricity consumption has only been reduced from commercial and industrial
operations that had to shut down, while residential consumption has remained relatively unaffected. On the other
hand, demand for petrochemicals produced by naphtha and natural gas liquids is increasing due to greater demand
for consumer packaging and personal protective equipment.
Overall, demand is expected to remain weak during the second-half of the year – although slightly improving in line
with the expected gradual lift of containment measures – with consumption in the Thai market expected to be down
by 4.3% for the full-year.
In supply terms, the failure of OPEC to reach an agreement to cut production and put a floor on oil prices before April
2020, when the average price of crude oil plummeted to a 20-year record low of $20 per barrel, is expected to be
devastating for the market’s revenues in 2020. In fact, the agreement reached in April 2020 between OPEC and OPEC+
countries to cut production will only slightly reduce revenue losses for 2020. Specifically, from May 2020 until the end
of June 2020, daily production was cut by 9.7 million barrels, and for the subsequent six months until December 2020,
the total cut agreed is 7.7 million barrels per day. Production cuts of 5.8 million barrels per day will also continue from
January 2021 to April 2022. The baseline for all the production cuts is based on October 2018 production levels,
except for Saudi Arabia and Russia, for which the baseline level is 11 million barrels per day. The price decline of
natural gas was less steep than that of crude oil, down by 32% on average since the beginning of the year, as the
impact on demand for natural gas was less adverse. In the case of natural gas, prices could fall further as the supply
gut that has suppressed prices most recently will take longer to be halted.
Demand in the market is expected to recover after 2020, given that the pandemic will be contained and the economic
recession caused from it will be short-lasting. According to the IMF’s revised projections in April 2020, the Thai
economy is expected to contract by 6.6% in 2020 and then recover by growing at 6% in 2021. The restart of economic
activity based on the relaxation of containment measures will allow the recovery of demand for fuel from
transportation activities, as well as that from electricity generation by industrial and commercial end-users. However,
consumption in the Thai market is still expected to be reduced until 2024 compared to 2019 levels, as a mid-term
consequence of the economic slowdown.
From the supply perspective, the planned oil production cuts from OPEC and OPEC+ members are projected to
increase the price of oil and support oil revenues in the market over the next two years. However, significant
parameters for oil supply and prices in that period, which is the trajectory of the US’s oil supply, as well as the policies
of the US administration over sanctions on Iranian oil exports, are still uncertain. Natural gas prices are expected to
follow the upward trajectory of oil prices, although at a slower pace.
What is more, investment in the market is expected to fall significantly during the forecast period as oil and gas
producers will have to reduce exploration and drilling activities and curtail existing production to maintain financial
Industry Profiles
health and prices at sustainable levels in the process of recovery of demand. The five largest oil producers have
already announced cuts in capital expenditure by around 15 to 25%.
Finally, energy’s transition to alternative and sustainable sources, such as solar power and wind power, will continue
to have an impact in the mid-term, gaining share from oil and gas in electricity generation, especially when their costs
are to remain stable overall against oil price increases.
Industry Profiles
3. Market Data
Industry Profiles
Table 2: Thailand oil & gas market volume: million BoE, 2015–19
Figure 2: Thailand oil & gas market volume: million BoE, 2015–19
Industry Profiles
4. Market Segmentation
Table 3: Thailand oil & gas market category segmentation: $ billion, 2019
Category 2019 %
Refined Petroleum Products 24.1 84.5%
Natural Gas 4.4 15.5%
Figure 3: Thailand oil & gas market category segmentation: % share, by value, 2019
Industry Profiles
Table 4: Thailand oil & gas market geography segmentation: $ billion, 2019
Geography 2019 %
China 282.2 40.2
Japan 80.1 11.4
India 79.4 11.3
Indonesia 34.1 4.9
Thailand 28.5 4.1
Rest Of Asia-pacific 198.1 28.2
Figure 4: Thailand oil & gas market geography segmentation: % share, by value, 2019
Industry Profiles
5. Market Outlook
Table 5: Thailand oil & gas market value forecast: $ billion, 2019–24
Figure 5: Thailand oil & gas market value forecast: $ billion, 2019–24
Industry Profiles
Table 6: Thailand oil & gas market volume forecast: million BoE, 2019–24
Figure 6: Thailand oil & gas market volume forecast: million BoE, 2019–24
Industry Profiles
6.1. Summary
Figure 7: Forces driving competition in the oil & gas market in Thailand, 2019
The oil and gas market is characterized by the presence of large, diversified international companies with highly
vertically integrated operations throughout oil exploration, production, refining, transportation, and marketing.
Competition exists between companies of similar size which operate in the same part(s) of the value chain. Overall,
competition dynamics are different across the activities (upstream, midstream, downstream) of the oil and gas
market. Rivalry can be limited as the market is highly concentrated to a small number of large companies, but lower
oil and gas prices in recent years have induced stronger competition.
Due to the importance of the products offered in this market, with oil and gas being the most common primary
sources of energy, there is a mass market of buyers, including individuals and firms, with large institutional buyers
among the latter. Buyers can be price sensitive due to the significant cost of oil and gas, but the indispensability of
these products for them, offsets that condition. Demand for oil and gas is fairly inelastic as households and firms are
reliant on fuel for their activities, thus their consumption has limited responsiveness to price changes.
There are different suppliers across each stage of the value chain of the oil and gas market, which is divided into three
distinct types of activities (upstream, midstream, downstream). Due to the nature of this market, with the supply of
oil and gas restricted to a limited number of natural resources, companies exploiting these resources can have
monopolistic power. Oil and gas shipping companies also have significant supplier power as they provide the only
large scale means of transportation across the oceans, while the large economies of scale required in this business
result in a small number of large companies.
The presence of powerful incumbents and the need for substantial initial investment in oil and gas fields, heavy
equipment, and technology, reduce the threat of new entrants into the market. Oil and gas market players also have
to comply with regulations and standards set by the jurisdiction in which they operate. Complying with government
Industry Profiles
regulatory requirements on safety, environmental protection, fiscal regimes, and product standards, increases the
capital investments and operating costs.
Whilst alternative energy sources do exist as substitutes for oil and gas products, they are often more expensive and
in some cases they are not perfect substitutes, meaning that buyers are, to an extent, reliant on players operating in
this market. Nevertheless, as awareness over global warming and sustainable environment increases, the importance
of alternative sustainable energy sources, such as solar, wind power, has increased.
Industry Profiles
Due to the importance of the products offered in this market, with oil and gas being the most common primary
sources of energy, there is a mass market of buyers, including individuals and firms, with large institutional buyers
among the latter.
Large institutional buyers include petrochemical companies that use oil by-products such as naphtha and bitumen as
their raw material input; these include giant multinationals such as Dow Chemical and BASF, as well as local
companies such as PTT Public Co Ltd. Large institutional buyers also include local utility companies, such as Electricity
Generating Authority of Thailand and Glow Energy PCL, which use natural gas or oil as a primary source of energy for
electricity generation. According to latest data available from the International Energy Agency (2018), oil and natural
gas comprised 0.3% and 54%, respectively, of the primary energy fuel mix for electricity generation in Thailand.
Residential demand for oil and gas as fuels for heating in Thailand makes up for 3% of oil consumption, according to
the IEA (2018). The airline, maritime, and manufacturing industries, where core operations are highly reliant on fuel
input, are large buyers for the oil and gas market. Fuel consumption from transportation activities, including fuel
consumption from non-commercial vehicles, account for 44% of oil consumption in Thailand, according to IEA (2018).
Industrial demand, including petrochemical companies and other manufacturing industries that use oil and gas
products as inputs or fuels, account for 8% oil and 47% of natural gas consumption in Thailand, according to the same
source. Fuel retailers and wholesalers are also considered to be buyers, although there are only a few that are
independent from market players. Market players are characterized by highly vertically integrated operations
throughout oil exploration, production, refining, transportation, and marketing, and they can act as both buyers and
players within different stages, thus occupying the trade stage of the value chain as well. Overall, large buyers may
have greater bargaining power as they are an important source of revenue for players, but the indispensability of fuel
for them mitigates that power. Buyers can be price sensitive due to the significant cost of oil and gas, but the
indispensability of these products for them, offsets that condition. Demand for oil and gas is fairly inelastic as
households and firms are reliant on fuel for their activities, thus their consumption has limited responsiveness to price
changes. According to BP’s 2020 Statistical Review, oil and natural gas accounted for 48.5% and 32.6% of primary
energy consumption in Thailand in 2019, respectively, with these rates indicative of a higher dependence on these
fuels compared to other countries. In total, the annual per capita consumption of oil and gas in this market tends to
Industry Profiles
be moderate in comparison to other countries, estimated at 12 barrels of oil equivalent in 2019, according to
MarketLine’s in-house research.
Crude oil and natural gas are commodities, which are largely undifferentiated for end-users. Although there are
different types of crude oil products, with slightly different properties depending on their origin, the various refined
oil products such as motor and aviation gasoline, diesel, jet fuel, kerosene, naphtha, marine (bunker) oil, have
different uses, with products for each use being largely undifferentiated. Gasoline can be differentiated by the
number of octanes, facilitating the distinction of gasoline products such as regular unleaded, premium unleaded, and
super unleaded. In addition, large market players usually differentiate their gasoline products through the addition of
extra engine-cleaning additives.
Brand loyalty is not likely to be a significant factor in this market (unless there are loyalty programs in place) so buyer
power is strengthened. Switching costs for individual buyers are not likely to be high. However institutional buyers
may enter into long-term supply contracts, which will increase switching costs.
The prices of oil and gas commodities are set according to supply and demand by the mercantile exchanges of New
York, London, and Dubai, which enhances buyer power on the basis of an open market. Moreover, buyer power can
be strengthened to some extent through the use of future or option contracts when trading with market players.
Through the use of option contracts, buyers purchase the right to buy a specified amount of oil or gas for a predefined
price at a certain date in the future, or in the case of future contracts they enter in a legal obligation to purchase a
certain amount of oil or gas at a predefined price at a later date in the future. That enables buyers to set the price
beforehand, meaning that they can buy oil or gas at a fixed price in the future, mitigating the volatility of oil and gas
commodity prices.
Backwards integration is uncommon since extracting and refining oil and/or gas requires a vast amount of capital
invested in heavy duty equipment which is outside of the reach of most buyers. Some very large-sized buyers that are
heavily reliant on fuel may be an exception to this. Delta Airlines, for example, has established its own oil refinery to
reduce fuel costs. Ultimately though, the likelihood of backwards integration is slim at best.
Overall, buyer power within the Thai oil and gas market is assessed as moderate.
Industry Profiles
There are different suppliers across each stage of the value chain of the oil and gas market, which is divided into three
distinct types of activities: the upstream, which includes exploration, extraction, and field development activities; the
midstream, which includes transportation and storage activities; and the downstream, which includes processing
(refining), trading, and distribution to end-users. Large market players are typically vertically integrated across all
three stages, and therefore they can act as suppliers to smaller players operating in only one or two stages of the
value chain.
Due to the nature of this industry, with the supply of oil and gas restricted to a limited number of natural resources,
companies exploiting these resources can have monopolistic power. In fact, that monopolistic power of national oil
companies exploiting some of the largest oil reserves located in Russia, Saudi Arabia, Venezuela, the UAE, Nigeria,
Iran, Iraq, Libya, and Kuwait is formalized through the cooperation of these countries under the Organization of the
Petroleum Exporting Countries (OPEC) operating since 1960. OPEC, the only official cartel protected by state immunity
under international law, is made up of 13 countries (Saudi Arabia, Iraq, Iran, UAE, Kuwait, Venezuela, Nigeria, Angola,
Algeria, Libya, Republic of the Congo, Gabon and Equatorial Guinea). The OPEC members coordinate their actions to
fix oil prices by adjusting supply (their level of oil production levels) in order to preserve stability in the global oil
market and to solidify their income as producers. In addition to the OPEC members, ten oil exporting countries
(Russia, Azerbaijan, Kazakhstan, Brunei, Bahrain, Malaysia, Mexico, Oman, Sudan and South Sudan) grouped as OPEC+
joined forces with OPEC in 2016, participating in fixing oil prices by agreeing to production quotas. OPEC meeting
conferences take place twice a year to review market conditions, while extraordinary meetings are held when
required. Decisions made must be unanimous with the agreement of all member countries, which can be challenging
due to conflicts between members’ interests.
In the case of natural gas, although there is no official cartel to coordinate the actions of the largest gas producers, the
concentration of more than half of natural gas reserves in only three countries (Russia, Iran, Qatar) practically gives
oligopolistic power to the state-owned companies that control these reserves in those countries. In fact, the larger the
production volume, the larger the power of an oil and gas company can be through a greater share of supply control.
The power of suppliers with control over oil and gas reserves stems from the fact that hydrocarbons (oil and gas) have
no substitute inputs; oil and gas are the only reliable and efficient fuels widely available at present. Additionally, as oil
and natural gas are both hydrocarbons, they often co-exist in the same wells, and that increases concentration of
Industry Profiles
power to upstream companies. Raw natural gas is usually found in crude oil wells as a by-product, where it is called
associate gas, while it also can be found in “dry” gas wells that only include natural gas, or condensate wells that
contain both natural gas and natural gas liquids (NGL).
Companies engaged only in upstream activities can be suppliers for companies engaged in midstream activities, as
well as for oil refineries or natural gas processing plants. Although oil and gas are largely undifferentiated
commodities, there are more than 150 types of crude oil with variable properties depending on their origin and the
well they are extracted from, and that can slightly differentiate suppliers’ input for refineries. Crude oil’s density (API
gravity) and sulfur content determine its treatment in refineries, particularly affecting the separation (distillation) and
conversion (catalytic reforming and cracking) processes. For example, crude oils which have low API gravity (high
density), classified as heavy crude oils - are of lower yield and thus cheaper, as they are harder to refine than crude
oils with high API gravity (low density), which are classified as light crude oils. Crude oils with high sulfur content
(0.5% or above), which are classified as “sour” crude oils are also of lower yield and take more time to refine than
crude oils of low sulfur content, known as “sweet” oils. Jet fuel, gasoline, kerosene and naphtha refined oils fall under
the category of very light oils, while bunker and other marine oils fall under the category of heavy oils. Overall, there
are four common types or super-categories of crude oils: Brent, which is a blend of sweet light crude oils from the
Northern Sea, the price of which is a benchmark for the price of other crude oils produced in Europe, West Africa and
Middle East; the West Texas Intermediate (WTI), a light high-yield oil produced in North America, the second most
important benchmark oil worldwide; the Dubai or Dubai-Oman, a sour crude oil of the Middle East; and the Tapis
crude, a light crude oil produced in Malaysia that serves as a reference for other light oils from East Asia. Natural gas is
more standardized as a final product but its raw form can vary, similar to crude oil. Raw natural gas may contain a
wide range of hydrocarbon products, namely ethane, propane, butane and pentane, as well as hydrogen sulfide,
carbon dioxide or similar acidic gases which need to be separated to obtain the final product. Raw natural gas with
very low hydrogen sulphide content sulfur content, called sweet gas, is easier and quicker to refine to final product,
unlike sour or acidic raw natural gases that contain hydrogen sulphide and carbon dioxide. Thailand is reliant on oil
imports but it is self-reliant on gas supply; the country’s oil domestic production was equal to 38% of consumption,
while gas domestic production was three times higher than gas consumption, as of 2017, according to IEA latest
figures. The largest oil and gas exploration and production companies operating in Thailand include Chevron
Corporation and PTT Public Company Limited.
Oil and gas equipment and services providers, including Schlumberger, National Oilwell Varco, Baker Hughes (General
Electric), Siemens or Halliburton, are major suppliers for players in the upstream stage of the market. Typically, such
suppliers are large, highly diversified companies, affording them greater bargaining power within the market. Baker
Hughes and Haliburton, for example, have a wide product portfolio catering to the worldwide oil and natural gas
market. Due to the variety of drilling techniques employed (diamond core drilling, hydraulic rotary drilling, auger
drilling, reverse circulation drilling, cable tool drilling, and sonic drilling) depending on the geomorphology of the oil
and gas fields and cost considerations, and the specialized equipment used for each for these drilling techniques,
suppliers of this equipment and services such as Baker Hughes, Halliburton, and Schlumberger have a strong position.
For example, Baker Hughes manufactures and supplies drill bits, primarily roller cone bits, and fixed-cutter
polycrystalline diamond compact (PDC) bits. Halliburton and Schlumberger also provide equipment and services for
exploration, as well as drilling and evaluation services for oil and natural gas wells.
While large upstream companies are typically forward integrated into midstream operations, there are also large
midstream companies that operate storage and pipeline distribution networks. Pipelines are the most common way of
gas transportation, as other ways of transportation are more difficult and costlier, and they are usually owned by
upstream players, the state, or energy companies. However, only in the US and Canada, pipeline systems for the
transportation oil and gas are the most extensive, where they account for at least 70% of the total oil volume
transported. Thailand has a significant gas pipeline network for the size of the country. The largest pipelines include
the Erawan–Rayong I,II,III, operated and owned by PTT Public Co Ltd and the Trans Thailand–Malaysia gas pipeline
jointly owned by Petroliam Nasional Bhd and PTT Public Co Ltd. Overall, PTT Public Co Ltd dominates in the operation
of the pipeline network in this market. Regarding storage facilities, Chevron Corp and P.C. Siam Petroleum Co Ltd are
the largest operators of oil storage facilities.
There also independent providers of transportation services, accounting for a significant share of midstream activities,
such as oil and gas shipping, road transport, and railway operators, which move unrefined products from production
sites to refineries or deliver the various refined oil and gas products from refineries to distributors and service
stations. Oil and gas shipping companies have significant supplier power as they are the only large scale means of
transportation across oceans, while the large economies of scale required in this business result to a small number of
large companies. Large companies operating oil and gas tankers include Frontline Ltd, Teekay Corp, Nordic American
Industry Profiles
Tanker, Euronav, Tsakos Energy Navigation, Maersk A/S, DHT Holdings Inc., and Ship Finance International Limited.
The manufacturers of these vessels are huge industrial conglomerates like Daewoo Shipbuilding & Marine
Engineering, Hyundai Heavy Industries, Samsung Heavy Industries, and Mitsubishi Heavy Industries, which have
considerable supplier power. Vertical integration to oil and gas shipping business is common among the largest
market players such as Shell, BP, and Chevron, which usually lease tankers, but this is less common for smaller players
that have less financial muscle to engage in these operations. Freight rates, which is the cost of transportation from
one port to another, typically range from US$10 to US$40 per metric tonne of oil, depending on the price of oil, the
size of the vessel, the route (port tariffs), and mileage of the trip. Freight rates have declined over the last three
decades; carriers have invested in larger and more energy efficient vessels to benefit from cost savings, but that has
also resulted in vessel oversupply in recent years, which has reduced freight rates, to the benefit of market players.
Refineries, natural gas processing plants and LNG terminals, which are part of the downstream activities, can also be
suppliers for independent players engaged in oil trading and distribution activities. While refineries tend to be part of
the business of large vertically-integrated oil companies such as BP, Shell, and Total in this market, there are also
independent players such as Valero Energy Corp and Phillips66, whose activities are limited to buying crude oil from
upstream companies, processing to refined oil products, and then selling them to wholesalers or retail distributors.
Amongst suppliers, there is also labor, given that the oil and gas market is labor intensive, as well as landowners or
governments. Government entities can have exclusive authority to pursue or grant licenses for pursuing oil
exploration and production, while in some cases they may own pipeline networks, and can be viewed as suppliers
with a strong position.
Switching costs between suppliers and market players are relatively high, strengthening supplier power. Market
players tend to enter into long-term contracts with their crude oil or gas suppliers in order to avoid price fluctuations.
These kinds of contracts are very likely to include high exit fees, increasing supplier power.
Supplier power can also be affected by the price of commodities. For instance, for suppliers of drilling equipment and
exploration services, when the price is high, oil and gas companies may explore deposits that were previously deemed
too costly, which would boost their revenues. However, when the price is low, investment in drilling and exploration
could fall, which would increase competition between suppliers. According to the International Energy Agency (IEA), in
2016 global oil discoveries hit their lowest point in 70 years; however, crude oil prices have risen by 56% since then.
For refineries, oil price movements can affect their profit margins; oil refineries’ profit margin, referred to as crack
spread, is based on the price difference between crude oil and the refined products extracted from it. The price
relationship of crude oil and refined products may not always be perfectly correlated – as there can be lag in price
movements from crude oil to refined oil based on storage stocks. Refineries tend to hedge price movements that
could squeeze their margins by buying and selling futures contacts. In this way, they can fix the prices of their crude oil
inputs and refined oil outputs, which enhances their power over suppliers and buyers.
Overall, supplier power in the oil and gas market is assessed as strong.
Industry Profiles
The analysis of the threat of new entrants into the oil and gas market is complicated by the fact that it is possible for
companies to operate in one or more parts of the supply chain. However, all means of entry require a vast amount of
capital investment for infrastructure and equipment. Leading incumbents are typically large, highly vertically-
integrated, multinational companies, which use the large scale of their production and distribution networks to
reduce costs and enhance profitability. To enter the Thai oil and gas market, significant financial power is required to
compete with large incumbents such as PTT Public and Chevron Corp, which have an established position and financial
strength. These players have invested heavily in oil fields, drilling rigs, technology, and product innovation, which
increases the barriers for new entrants. New entrants into a specific market are more likely be large existing operators
expanding, rather than a new market player created from scratch.
Licensing is a significant regulatory hurdle. In the upstream segment, permission to explore new fields and extract oil
and gas is generally given by national governments, and obtaining it may be a lengthy process. Exploration, appraisals,
and drilling licences can be subject to a lengthy and costly process of complying with financial and environmental
regulation, while obtaining these licences can also be a result of a lengthy process of international auctions. In some
cases, onshore oil and gas rights are owned by individuals, while offshore oil and gas fields are typically owned by
governments. In general, most countries, are open to agreements with private foreign oil and gas companies to
exploit oil and gas fields. Only in some cases, states operate monopolies in oil and gas exploitation, as seen with
Gazprom in Russia, or PDVSA in Venezuela.
The cost of land/field acquisition or lease and royalty fees paid to governments account for a large part of the total
investment. Tax treatment and financial incentives can impact the descision of prospective players to enter a
country’s market, as these parameters can have a significant effect on their profits. There are two main types of
agreements between governments and oil companies; the Production Sharing Contract (PSC) and concession
agreeements. In PSCs, the government retains title of ownership to oil and gas resources and has a right to share
profits on the oil and gas produced, taking into account the costs of exploration, drilling, and production for the oil
and gas company. Under concession agreements, the government transfers title of ownership of resources to the
oil/gas company, which owns the oil and gas produced, and imposes tax and royalties. Royalty fees refer to the
government's/landowner’s entitlement to a portion of the resource or revenue that is produced, and is usually a
clause upon concession agreements to ensure a long-term income tied to the value of resources for the ownership
holder or the concessor.
Industry Profiles
Moreover, upstream activities (exploration, extraction, and field development) require massive investment in
industrial equipment such as drill rigs and pumps and infrastructure facilities around oil and gas fields, and that
reduces the threat of new companies establishing themselves in this market. The total cost of well development can
vary greatly depending on the depth and purity of oil reserves, the geomorphology, and the well’s design. The cost of
drilling an oil well can be anything from a few million to a few hundreds of million dollars. Well development costs are
significantly higher for offshore activites due to the costly requirement of construction of oil platforms and the added
transportation costs to the shore. In fact, offshore drilling can make up for 65% of the total fixed cost of well
development costs, compared to 30 to 40% in onshore projects, while it can cost 15 to 20 times more. Similarly, for
non-conventional oil (shale oil), the cost of extraction is increased as mining and horizontal drilling is involved, while
the processing of shale oil is also more complex and costly, with lower yields, so that its extraction is only profitable
when conventional oil prices are high, at least higher than the cost of shale oil extraction.
Exploration and drilling activities are subject to financial risks, as the cost of investment can be huge, while the returns
might be limited or even negative if the amount of oil and gas extracted is less than what was initially estimated. The
process of exploring, developing and drilling a well is also lengthy. It can take from 3 to 10 years, which means that a
prospective entrant needs access to significant capital during that period. Variable costs can also be high, due to the
ongoing production, transportation, and administrative costs.
Smaller companies can theoretically enter in the upstream activities, based on a farmout business model. Small
companies can undertake the initial cost of investment in oil and gas fields, such as the exploration and land
acquisition, and farmout the production to larger oil and gas companies. In this way, smaller companies that retain
ownership rights on the field are paid a royalty interest on production, once the field is developed, without being
liable for operating costs. Farmout agreements benefit both parties, as smaller oil and gas companies that do not have
the financial or technological resources for drilling and production can harness a potential profit opportunity. While
large oil and gas companies that take up production reduce their financial risk as the farmee pays royalty fees to the
farmor once production initiates, and the farmee still retains a large share of profits from the production.
Ultimately, entering the upstream activities of the oil and gas market is dependent on the availability of unexploited
reserves.
Midstream activities are also highly capital-intensive, although they are less risky than upstream activities. Prospective
players involved in transportation or storage of oil and gas or the construction of pipeline networks will need access to
significant capital to facilitate investments in infrastructure.
Pipelines are the most economically and enviromentally efficient way to transport oil and gas, but upfront costs for
the construction of such infrastructure can be massive. In the case of natural gas, pipeline transportation is even more
economically compelling as gas has to be liquefied to liquefied natural gas (LNG) in order to be transported, which
further adds to the cost of transportation. Pipeline networks can be profitable for large distances, running across a
country or through multiple countries. However, building an international pipeline requires successful navigation of
various national regulations to secure permits. In some cases pipelines might not be technically feasible. Players may
also be detered by geopolitical or energy security concerns.
Other means of transportation of oil and gas within a country-market are dependent on the location and the
infrastructure of the country, such as access to sea, or a wide road and railway infrastrucure network. In the case of
shipping and road transportation, entry to the market is simpler through the acquisition of a fleet of vessels or trucks.
Moreover, players entering the oil shipping business automatically gain access to the global market of oil and gas
shipping. There is a wide size range of oil tankers, with the largest often travelling from the US, Gulf region and West
Africa to Europe and East Asia. Oil tankers of the largest-size categories, VLCC (Very Large Crude Carrier) and ULCC
(Ultra Large Crude Carrier), which have a dead-weight tonnage (DWT) of 200,000 to 320,000 and 320,000 to 550,000
tonnes, respectively, can cost from US$100 to US$120m, depending on their age. However, given the current
oversupply in this part of the market, it is unlikely to see new entrants.
Downstream activities are also highly capital-intensive. Setting up a refinery requires a substantial amount of capital,
typically billions of dollars, due to the size and the technology of these facilities. Refineries require large economies of
scale and investment in advanced and highly automated technologies, while they also have high operating costs,
typically employing hundreds of people. New refineries are even more capital intensive due to more advanced
engineering and equipment required to improve efficiency, and meet higher quality fuel standards and stricter
environmental legislation. The location of refineries is also of great importance as it directly affects the transportation
cost of crude oil to the refinery and the transportation cost of refined products to the market. Accordingly, proximity
Industry Profiles
to transportation hubs, equipment suppliers, and large buyers such as petrochemical companies is vital. Overall, entry
to this part of the market is dependent on the state of capacity in the market with regards to consumption.
In the case of natural gas, downstream activities of natural gas processing plants are simpler and less costly, as dry
natural gas from gas wells is usually pure and needs limited processing. Moreover, natural gas is unique as a final
product, unlike oil crude oil which can be refined to different types of oil products. In country-markets which are
reliant on LNG exports or imports, entry to downstream activities can be realized through LNG liquifaction or
regasification terminals, respectively. In fact, these have been growing as LNG imports account for an increasingly
large share of gas imports worldwide. Location for natural gas processing plants and LNG terminals is crucial, with
proximity to gas wells and pipeline hubs reducing costs.
As far as trading activities and distribution channels are concerned, oil and gas distribution to end-users can
theoretically be accessible, but customer trust and brand building can be important factors at play, thus deterring new
entrants. Moreover, retail distribution through oil and gas service stations requires significant capital to operate at a
sizeable network of stations. The brand strength of local and international oil and gas brands in this market such as
BP, Esso (ExxonMobil), Shell, and Total could deter new entrants.
Taxes on crude oil or gas imports can also discourage new downstream players to enter a market reliant on imports,
as higher taxes can suppress their margins.
Investment in R&D is also important in this market. In upstream activities, hydraulic fracturing has been an important
technological advance for the extraction of shale oil, allowing extraction companies to recover oil that was
unrecoverable a few years ago. In downstream activities, refining methods are constantly improving. Modern
refineries can convert more than half of every barrel of crude oil into gasoline, a huge advancement compared to 70
years ago when only a quarter of a barrel could be converted to gasoline.
Due to the importance of R&D in new technologies, the level of intellectual property in the oil and gas market is
significant. For example, in refining technologies, fluid catalytic cracking (FCC) is one of the most important conversion
processes, with mechanical design configurations patented by Shell, ExxonMobil and others. Likewise, Shell and
Chevron have developed their own shale oil extraction technologies.
Oil and gas market players have to comply with regulations in the markets where they operate. Complying with
government regulatory requirements on safety, environmental protection, and product standards, increases the
capital investments and operating costs. Regarding environmental protection, drilling activities will have to pass
environmental impact assessments, while in some cases they may be restricted depending on the level of
environmental regulation within a country. Refineries are a significant source of CO2 emissions through fossil fuel
combustion emissions, and they have to meet certain environmental protection requirements. These include reducing
CO2 emissions below a certain level by using advanced pollution control systems, and treating waste produced to
minimize air and water pollution. The cost of complying with CO2 emission standards is set to increase, as CO2
emission standards have been tightened since the Paris Agreement of 2016. Fuels produced by refineries have to
meet certain standards such related to their sulphur content and octane rating, which complicate processing and
increase production costs. Oil shipping companies must comply with safety regulations, as oil spills can result into
billion-dollar fines.
Entry to the oil and gas market also depends on the current and future dynamics of oil and gas demand and supply in
the global economy. High oil prices are more likely to attract new entrants as the profitability of all activities across
the value chain improves. In contrast, drops in oil prices can create a challenging environment for the market,
especially for upstream and downstream activities that bear high fixed costs, with supply reducing in response to this.
Additionally, the oil and gas market is vulnerable to overall economic conditions, geopolitical or military events, and
natural disasters that affect major oil-producing countries, which induce short term price volatility. Subsequently,
weaker demand and lower oil prices, due to the COVID-19 pandemic, are expected to deter new entrants.
In the long-term, oil and gas prices are expected to follow an upward trend as reserves become more scarce and
costly to drill, while demand will continue to increase. According to the Hubbert Peak theory, based on the historical
trend of discovery rates, the production oil and gas is expected to decline irreversibly after its peak, as global reserves
are depleted. This means that players could benefit from a long-term upward trend in prices, but on the other hand
the declining supply of oil and gas means less room for new players in the market.
Overall, the threat of new entrants is assessed as weak within the oil and gas market.
Industry Profiles
Whilst alternative energy sources do exist as substitutes for oil and gas products, they are often more expensive and
in some cases they are not perfect substitutes, meaning that buyers are, to an extent, reliant on players operating in
this market. Nevertheless, as awareness over global warming and sustainable environment increases, the importance
of alternative sustainable energy sources, such as solar, wind power, biothermal energy, hydroelectric energy,
wave/tidal energy, and biofuels (biomass or bioethanol) has increased. On the contrary, the use of coal and nuclear
energy as substitute sources has declined amid environmental and safety concerns. However, in Thailand, coal
remains a significant energy source, accounting for 13% of primary energy source consumption by fuel, according to
BP’s Statistical Review as of 2019.
Renewable energy substitutes are the most prominent as they offer notable benefits in terms of environmental
impact and sustainability. The production and demand of renewable energy has increased over the last two decades
as climate change has become a major issue. Solar and wind power are starting to occupy a greater share of the
energy market as a whole. In Thailand, 6% of primary energy consumption originated from renewable sources - mainly
hydropower – as of 2019, according to BP’s Statistical Review. This figure indicates a low rate of development in this
field compared to other countries.
Overall, the benefits of renewable energy sources can vary. Although renewable energy sources such as solar and
wind power are commercially viable and sustainable, with zero emissions, their biggest disadvantage is that they are
intermittently available, depending on the time of the day or weather conditions. The use of alternative sources like
hydroelectric energy or wave/tidal energy can also be limited depending on the geography, while development costs
are high. While power companies can alter their primary energy mix to a small extent without incurring many costs, a
full transition to these substitutes would require investment in new facilities, which constitutes a very high switching
cost. Therefore a major shift to renewable energy sources will take time to be fully realized.
The widespread adoption of an alternative use of energy also requires the transformation of technology for motor
engines in transportation, which is currently based on the use of hydrocarbons like oil and gas. Particularly, where oil
and gas products are commercially used as a fuel, such as in aviation, maritime and heavy-duty road transportation,
substitutes are very limited as most alternative sources of energy are not commercially viable or technically feasible
for this purpose. The use of batteries or capacitors that store electricity - as seen with electric cars - could be one
Industry Profiles
option to accommodate the use of alternative sources of energy in the future, but technology in this field is still in its
infancy and will not be commercially viable in the foreseeable future.
There are also very limited options of sustainable energy carriers (fuels) at present, namely hydrogen gas or biofuels,
although their production efficiency at large scale is still questionable. Hydrogen gas or biofuels differ from other
major substitute energy sources as they are fuels like oil and natural gas, and are a stable source of energy which can
be directly convered to power. Hydrogen, which contains three times more energy than natural gas, can be a
potentially renewable and zero-carbon emission energy source through the production process of electrolysis. This
process requires a huge infrastructure cost and is largely reliant on fossil fuels, reducing its threat as a substitute. A
few major automakers have released fuel-cell vehicles, based on fuel-cell technology that uses hydrogen as a fuel
instead of a battery to generate electricity that powers these vehicles. However, that technology is losing ground to
battery-electric cars. Regarding different types of biofuels made from organic matter and waste, bioethanol and
biodiesel are the most prominent. Bioethanol, which is alcohol typically produced by fermentation of starchy
agricultural crops such as corn or sugarcane, can be used as a pure fuel in a limited number of “flex-fuel” vehicles
available from major automakers. Bioethanol is already used as a gasoline additive in the US and Thailand, where
gasoline contains 10% to 15% ethanol to increase octane and reduce carbon emissions. In EU countries and Thailand,
gasoline is allowed to have up to 5% ethanol content. Biodiesel is produced from vegetable oils or animal fats using
transesterification, and is most common in Europe. It can also be used as a pure fuel in “flex-fuel” vehicles, but it is
mostly used as a diesel additive – up to 7% - to reduce levels of carbon monoxide from diesel-powered vehicles. The
International Energy Agency has set a target for biofuels to account for more than 25% of world demand for
transportation fuels by 2050, in order to reduce reliance on fossil fuels and decarbonise transport activities.
Moreover, major countries around the world have declared a ban on the sales of new cars with internal combustion
engines by the end of 2035 or 2040, to promote the adoption of electric cars.
It should also be mentioned that substitution also exists between oil and gas (intra-substitution). Although their prices
are highly linked since natural gas is often a by-product of oil extraction, refined oil fuels can be competitive
substitutes to natural gas in electric power generation and heating. Subsequently, an increase in the price of one
could increase demand for the other. This stems from the fact that the economics of non-associated gas fields are
different from the economics of associated gas extracted from oil fields, while the allocation of capital resources of
upstream companies between oil and gas can be competitive, leading to a decoupling of prices in the short-term. For
example, an increase in crude oil prices may lead to increase in oil drilling and a decrease in natural gas drilling, and
vice versa. However, the relationship between oil and gas prices is stable in the long-term, as a short-term change in
the production of one commodity leads to an opposite effect in the price, eventually changing the dynamics again in
favor of a long-term balance between the two commodities. Since 2013, the price ratio of oil and gas per barrel
equivalent has been stable overall, fluctuating between 3:1 and 4:1.
Ultimately, as reserves of oil and gas deplete over the following decades, it is expected the adoption of substitute
sources of energy will increase in line with rising environmental concerns and the advancement of fuel and battery
technologies. For this reason, leading oil and gas companies have sought to diversify their operations, to mitigate the
anticipated decline of oil and gas consumption over the next decades, investing in alternative energy sources such as
solar panels, wind power, and biofuels. In the mid-tem, alternative and sustainable sources will continue to gain share
from oil and gas in electricity generation, especially when the costs of alternative energy sources continue to fall.
Overall, there is a moderate threat of substitutes in the Thai market.
Industry Profiles
The Thai oil and gas market is highly concentrated to leading players PTT Public, Thai Oil Public, Chevron Corporation
and ExxonMobil, which have highly vertically integrated operations throughout exploration, production,
refining/processing, transportation and marketing.
The number of players within the country’s market might be small, but as oil and gas trade is internationalized,
competition is increased. Supermajor international companies such as Shell, ExxonMobil, BP and Total compete on
global scale, especially when it comes to discovering new oil and gas wells, while most sizeable oil and gas companies
also have an export market strategy. Rivalry also exists between large national oil companies and international oil
companies as the former, which in most cases are state-owned, may be favored by government policies, while they
may enjoy exclusive access to state-owned national oil and gas reserves.
The undifferentiated nature of the final products increases competition, as players have to focus on prices and output
in order to become more competitive. Accordingly, high operational efficiency is a key competitive advantage in all
activities of the market.
Due to the fact that oil and gas operations are highly labor intensive and asset-based, fixed costs are also high and the
market is hard to exit as leaving would require significant divestments of assets specific to the business. This increases
rivalry in the market.
Competition exists among companies of similar size which operate in the same part(s) of the value chain. Overall,
competition dynamics are different across the activities (upstream, midstream, downstream) of the oil and gas
market.
Competition in the upstream activities is mainly focused on the exploration and discovery of new oil and gas wells.
The discovery rate of new oil and gas well has been declining over the last three decades, which has increased rivalry.
Economies of scale and financial strength are key for competing in this part of the market; economies of scale are
important to achieve cost and production efficiency, while a strong financial base is required to support exploration,
drilling, and investment in new technologies to improve cost and production efficiencies.
The midstream market is more static in terms of competition, with the majority of players engaged in storage,
transportation, or pipeline networks. The players in this sector are either usually independent midstream companies
or international supermajors.
Industry Profiles
Competition in downstream activities, particularly in refineries can be intense. Refineries have little or no influence
over the price of their input or their output, which are shaped by supply and demand forces, and they must rely on
operational efficiency for their competitive edge. Improved efficiency is expressed through higher refinery yields,
which are the ratio of ouput over input, and can be a result of innovation in advanced technologies. Large economies
of scale are essential to absorb high fixed costs and enable reseach and development (R&D). Refineries with different
configurations and technological capacities provide a different volume and quality of output, thus technology can be a
key differentiation point. Refineries’ level of complexity is based on how much secondary conversion capacity
(catalytic cracking, coking and other secondary conversion/processing units) they have in addition to primary
distillation units. Higher complexity means a higher capacity of processing intermediate products to obtain higher
value products. In particular, refineries with advanced catalytic crackers, hydro-crackers and fluid cokers, are more
efficient in removing sulphur and other unwanted substances to meet strict environmental requirements for vehicle
fuels, and they are also more flexible in adjusting to new tighter regulation for fuel standards. The level of complexity
is also quantified by a generally accepted index, the Nelson Index (NCI). A higher NCI number is indicative of a more
complex refinery, which is more costly to build and operate, but will generate higher efficiencies. Simple refineries,
which are usually owned by smaller independent players, have low margins, which increases rivalry between these
smaller players. THE NCI index in this market tends to be moderat. Thai Oil Public appears to have a competitive
advantage against its rivals, having the most complex refinery in the market.
Refinery efficiency is reliant on the product mix as each type of refined oil product has a different margin. The type
and quality of input (crude oil) will also impact the refining process. Refinery operations are differentiated in terms of
product mix, with some refineries focused on lighter oil products such as gasoline and others on heavier oil products
such as marine fuel. Again, the complexity factor of refineries is at play. Complex refineries focusing on high value oil
products such as gasoline and petrochemicals, as they have an edge in processing them, while simple refineries focus
on heavier oil products such as bunker oil. Heavy residual oils typically account for half of a simple refinery’s
production and medium and lighter oil for a quarter each, while more than half of complex refineries’ output is
typically comprised by gasoline, one third by middle distillates, and a very limited amount by heavier oils. Refineries
can also differentiate the quality of their products based on their selection of crude oil inputs; the more complex the
refinery, the wider the range of crude oil inputs it can choose from. This means that the most complex refieneries
have again a competitive advantage as they can use cheaper heavy crude oils to produce lighter products and yiled
higher margins. Overall, the optimization of the mix of inputs and outputs, is a daily challenge for refineries;
programming that mix is the most complex and operational task they face. Ultimately, refineries aim to maximize their
margins (crack spread), which is the difference between the cost of the crude oil and the price at which it sells its
refined products. This has become more challenging in recent years; the increasing demand for lighter oil products,
particularly gasoline. The increasing supply of heavy crude oil creates a quality gap that fewer refineries can address
efficiently. Specifically, it takes a higher level of sophistication to convert heavier crude oil to lighter refined products,
and that increases competitive pressure for smaller, independent refineries with less advanced refining capacity. The
addition of secondary process units is crucial for all players to meet the increasing demand for high quality refined
products that offer higher margins.
For dry natural gas that comes out of gas wells, the refinery process in natural gas processing plants is minimal, which
reduces the level of sophistication required for downstream activities. However, competition in this field can be even
more intense as the degree of differentiation between players is even lower compared to oil refineries.
Brand strength is an important asset in downstream activities, especially in the retail distribution of oil and gas. This
limits the number of players in this field.
Vertical integration accross all activities of the market is crucial. The integration of large oil and gas companies across
the entire supply generates cost efficiencies, and provides a natural hedge against adverse price movements. For
independent oil refiners which purchase crude oil and sell refined products in the wholesale market, price volatility
can present a significant economic risk.
The level of demand can shape rivalry conditions in this market. As oil and gas are indispensable fuel inputs for
economic activity, households’ and firms’ demand is inelastic and strongly linked to the economic output. When the
economy expands, energy and fuel consumption increases, alleviating rivalry among players. In contrast, when the
economic activity shrinks, consumption reduces as well, which increases rivalry between due to the reduced market
size. Demand can also be affected by unusual weather patterns. Extremely cold or hot weather conditions increase
demand of households and commercial establishments for heating or cooling, while prolonged mild conditions reduce
that demand to the detriment of players in the activities. The Thai market has experienced good growth until 2017,
Industry Profiles
however, the decline of domestic production had a negative impact on demand. Subsequently, this has increased
competition in the market.
Supply can also be determinant of the rivalry conditions in the market. Supply is mostly influenced by the upstream
activities at global level and tends to be inelastic as it is dependent on the availability of natural resources, while oil
and gas companies would theoretically continue to produce at any price that covers their operating costs, given that
their fixed costs are high.
Due to the OPEC cartel of some of the largest oil-producing countries, the state-owned oil companies of OPEC
members, have the power to control supply by adjusting their production rates to maintain high prices. As OPEC and
OPEC+ members are responsible for more than half of the global oil production, their actions have huge influence on
global oil prices of oil and the wider market. This condition reduces rivalry in the upstream part of the industry as
supply movements are uniform and can counteract unfavorable demand conditions. For example, during an economic
recession, OPEC members will agree to cut supply in response to weaker demand, while they will increase supply
during an economic boom. In some cases, the interests of OPEC members will conflict with non-OPEC members, so
that OPEC’s power can be used against rival oil-producing countries. For instance, as the US oil shale production was
booming in 2012-14 period, capturing market share from OPEC countries, the OPEC decided to increase supply in
2014 in order to undercut US shale production, which has a higher break-even point. As a result, oil prices plunged in
2014-16 period, only recovering after OPEC (led by Saudi Arabia) and OPEC+ (led by Russia) decided to join forces to
increase prices by cutting supply. However, when Saudi Arabia pledged to reduce supply in March 2020, in response
to weaker demand amid the COVID-19 pandemic, the unwillingness of Russia to follow brought retaliation from Saudi
Arabia, which increased its supply, causing oil prices to plummet. The conflicting interests of the largest oil-producing
parties can increase rivalry in the industry, while cooperation can switch off competition. Oil and gas companies can
perform oil-storage trade (contango) - even though storage costs can be significant - and buy or hold oil in storage
when prices are low, to sell it when prices are higher. In this way, the strategies of oil companies may inadvertently
align.
In Thailand, the supply of oil is highly concentrated to state-owned PTT Public and Chevron, which operate the
majority of oil producing fields in the Pattani basin. These two players account for more than 80% of the oil
production in this market. Their market power is also increased in downstream activites, where ExxonMovbil along
with a few independent players have signficant presence in refinery and distribution activities. Overall, the high
concentration of market power to a small number of players reduces compeition in this part of the market.
In the case of natural gas, although there is no official cartel, the high concentration of resources in a handful of
countries, and the large size of incumbent natural gas (and oil) companies, limits competition, as prices can be largely
influenced by them in an oligopolistic form. However, storage costs are higher for natural gas as it is more difficult to
store it due to its gas state, and that is more likely to induce competition. Accordingly, natural gas is more prone to
short-term price shocks and supply imbalances that disrupt the market and induce rivalry.The supply of gas in
Thailand is also highly concentrated to PTT Public and Chevron, which account for almost the total of gas production
in this market by exploiting the largest gas fields in the Malay-Tho Cho basin. PTT Public is also dominant in
downstream activities, through the ownership of the majority of processing plants and pipelines in this market, and by
being the leading distributor of gas in the market as well. Overall, the high concentration of market power to one
player is ultimatelly reducing competition in this part of the market.
The level of supply in midstream activities related to transportation and storage can impact rivalry in the market.
Supply for these activities is not dependent on the availability of oil and gas resources, but it is dependent on the
demand for oil and gas. Accordingly, when there is oversupply (overcapacity) of oil and gas tankers or oil and gas
storage facilities, rivalry among players in these activities increases as they are forced to compete on price. In
contrast, when demand exceeds supply, rivalry is reduced. As far as pipeline networks are concerned, competition is
almost non-existent as pipelines are essentially a geographic monopoly; it is not economically viable for multiple
competing pipelines to exist in the same area.
In downstream activities, and particularly in refineries, oversupply can increase rivalry, similar to the midstream
activities. However, as there is higher level of integration of upstream companies in the downstream activities, so that
condition is less likely. Due to the complexity of investment in new refineries, supply tends to be stable overall, with
additions in refinery supply mainly coming from the additions in the capacity of existing players. Moreover, refinery
utilization rates, which are a major factor impacting profitability, can highlight the level of input with respect to
capacity. Typically, a 95% utilization rate is considered as optimal.
Industry Profiles
Regarding trade and distribution activities in the downstream activities, the level of supply does not have significant
impact on rivalry as players in this field have limited influence on prices, while the number of independent players is
also limited.
Ultimately, prices, as the equilibrium point between demand and supply are indicative of the rivalry conditions in each
activities of the market. Lower oil prices increase rivalry as they suppress profitability, especially for refineries that
have high fixed costs and limited influence on prices, and for drilling companies operating wells with high break-even
points. On the contrary, higher oil prices can improve the margins of players in the market, allowing players to
expand, with competition being less fierce. The fall in oil and gas prices in period 2014-16 with a prolonged low-price
environment since then – the lowest since the aftermath of the financial crisis of 2008 - has increased rivalry between
players in the market, as it has become more difficult for smaller players to compete as they do not enjoy economies
of scale.
The sharp drop in oil prices in the first quarter of 2020, amid a sharp drop in demand due to the COVID-19 pandemic,
is set to increase rivalry in the market, suppressing margins for players. Weak demand conditions are set to last for the
whole year, with investments in exploration and production significantly cut and utilization rates for refineries far
below optimal levels. Consequently, players could face major financial pressure that could impair their financials.
Moreover, the impact of an economic recession caused by the pandemic is continue over the coming years , as
consumption may take years to recover to previous levels, intensifying rivalry conditions in the mid-term as a result.
Overall, there is a strong level of rivalry in the Thai oil and gas market.
Industry Profiles
7. Competitive Landscape
Among the leading players in Thailand are Chevron and Total. Several contracts and acquisitions reshaped the
competitive landscape in 2019, and in the future this landscape is likely to see a considerable impact from COVID-19.
Industry Profiles
segment includes refining, petrochemicals, specialty chemicals, and crude oil and petroleum product trading and
shipping. Marketing & Services segment covers the supply and marketing of petroleum products. Total is one among
the top ten integrated chemical producers in the world. The company’s petrochemical operations are integrated
within its refining operations, thereby maximizing synergies.
In addition, PTT Public Co Ltd focuses on research and development (R&D) activities that aim to improve its
operational performances. PTT’s R&D arm focuses on activities that could help in cost reduction and process
improvement, quality assurance, process control, and system development. It conducts R&D activities through PTT
Research and Technology Institute (PTT RTI), which formulates research planning and management. PTT’s R&D focus
areas include development of new technologies, product development, and environmental research. PTT RTI's R&D
areas include petroleum products and alternative fuels research, process technology research, energy application
technique and engine lab, research to preserve environment, geo-science and petroleum engineering research and
business research.
Industry Profiles
8. Company Profiles
Chevron Corporation (Chevron or 'the company') is an integrated oil and gas company that carries out upstream and
downstream operations. The company explores for, develops and produces natural gas and crude oil; processes and
transports liquefied natural gas; transports, storage and markets natural gas; and a gas-to-liquids plant. It also markets
crude oil and refined products; plastics for industrial uses and fuel and lubricant additives. Chevron transports crude
oil, manufactures and markets commodity petrochemicals, and refined products by pipeline, marine vessel, motor
equipment and rail car. It has business presence across North America, South America, Europe, Africa, Asia, and
Australia. The company is headquartered in San Ramon, California, the US.
The company reported revenues of (US Dollars) US$140,156 million for the fiscal year ended December 2019
(FY2019), a decrease of 11.7% over FY2018. In FY2019, the company’s operating margin was 2.2%, compared to an
operating margin of 9.7% in FY2018. In FY2019, the company recorded a net margin of 2.1%, compared to a net
margin of 9.3% in FY2018. The company reported revenues of US$29,244 million for the first quarter ended March
2020, a decrease of 15.7% over the previous quarter.
Head office: 6001 Bollinger Canyon Road San Ramon, California, United States
Number of Employees: 48200
Website: www.chevron.com
Financial year-end: December
Ticker: CVX
Stock exchange: New York Stock Exchange
Chevron Corporation (Chevron or 'the company') is an energy company that carries out fully integrated petroleum and
chemical operations. The company explores for, develops, produces and markets natural gas and crude oil; processes
and transports liquefied natural gas; refines crude oil into petroleum products and markets refined products. It also
transports crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufactures
and markets commodity petrochemicals, plastics, fuel and lubricant additives. The company has operations in North
America, South America, Europe, Africa, Asia, and Australia.
Chevron operates through three reportable business segments: Downstream; Upstream and All Others.
The Downstream segment consists of refining crude oil into petroleum products; marketing of crude oil and refined
products; and transporting crude oil and refined products by pipeline, marine vessel, motor equipment and rail car.
The segment also manufactures and markets commodity petrochemicals, plastics for industrial uses and fuel and
lubricant additives. The company's major marketing areas in the segment are the West Coast and Gulf Coast of the US,
and Asia. In FY2018, the company had a refining network capable of processing over 1.6 million barrels of crude oil per
day. Chevron processes both imported and domestic crude oil in the US refining operations. The company markets
Industry Profiles
petroleum products under the principal brands of Chevron, Texaco and Caltex throughout many parts of the world. At
the end of FY2018, the company supplied directly or through retailers and marketers approximately 7,900 Chevron-
and Texaco-branded motor vehicle service stations, primarily in the southern and western states. Approximately 310
of these outlets are company-owned or -leased stations. Outside the US, Chevron supplied directly or through
retailers and marketers approximately 5,000 branded service stations, including affiliates. The company also operates
through affiliates under various brand names. In South Korea, the company operates through its 50% owned affiliate,
GS Caltex. Additionally, Chevron markets commercial aviation fuel at approximately 90 airports worldwide. The
company also markets an extensive line of lubricant and coolant products under the brand names Havoline, Delo,
Ursa, Meropa, Rando, Clarity and Taro in the US and worldwide under the three brands: Chevron, Texaco and Caltex.
During FY2018, the company's marketing operations business sold a total of 2.6 million barrels per day (bpd) of
petroleum products worldwide including 1.2 million bpd of products in the US and 1.4 million bpd of petroleum
products internationally. The company carries out its chemical activities through Chevron Phillips Chemical Company
(CPChem) and Chevron Oronite Company (Oronite). Chevron owns 50% interest in its CPChem affiliate. CPChem
produces olefins, polyolefins and alpha olefins and is a supplier of aromatics and polyethylene pipe, in addition to
participating in the specialty chemical and specialty plastics markets. In FY2018, CPChem had joint-venture interests in
28 manufacturing facilities and two research and development (R&D) centers across the world. Oronite develops,
manufactures and markets performance additives for lubricating oils and fuels and conducts R&D for additive
component and blended packages. In FY2018, the company produced, blended and conducted research at 10
locations around the world. Chevron also maintained a role in the petrochemical business through the operations of
GS Caltex, a 50% owned affiliate which manufactures aromatics, including benzene, toluene and xylene. These base
chemicals are used to produce a range of products, including adhesives, plastics and textile fibers. GS Caltex also
produces polypropylene, which is used to make automotive and home appliance parts, food packaging, laboratory
equipment, and textiles. The company's transportation businesses include pipeline and shipping operations, which are
used for transporting a variety of products to customers worldwide. Chevron owns and operates a network of crude
oil, natural gas and product pipelines and other infrastructure assets in the US. The company also has direct and
indirect interests in other US and international pipelines. The company's marine fleet includes both the US and
foreign-flagged vessels. The US-flagged vessels are engaged primarily in transporting refined products, primarily in the
coastal waters of the US. The foreign-flagged vessels are engaged in transport crude oil, liquefied natural gas (LNG),
refined products and feedstocks in support of the company's global Upstream and Downstream businesses. In FY2018,
the Downstream segment reported revenue of US$129,471 million, which accounted for 67.7% of the company's total
revenue.
The Upstream segment’s activities consists of exploring for, developing and producing crude oil and natural gas; and
processing, liquefaction, transportation and regasification associated with LNG. The segment also includes
transporting crude oil by major international oil export pipelines; transporting, storage and marketing of natural gas;
and a gas-to-liquids plant. Chevron has exploration and production activities in most of the world's major hydrocarbon
basins. In the US, Chevron's upstream activities are concentrated in California, the Gulf of Mexico, Colorado, New
Mexico, Ohio, Oklahoma, Pennsylvania, Texas and West Virginia. In other America's, the company operates in
Argentina, Brazil, Canada, Colombia, Mexico, Greenland, Suriname, and Venezuela. In Africa, the company is involved
in exploration and production activities in Angola, Republic of the Congo, Liberia, and Nigeria. Moreover, the
company's presence in the upstream activities in Asia includes operations in Azerbaijan, Bangladesh, China, Indonesia,
Kazakhstan, the Kurdistan Region of Iraq, Myanmar, the Partitioned Zone located between Saudi Arabia and Kuwait,
the Philippines, Russia, Thailand, and Vietnam. In Australia and Oceania region, the company operates in Australia and
New Zealand. In Europe, the company is involved in upstream activities in Denmark and the UK. At the end of FY2018,
worldwide total oil equivalent reserves totaled 12.1 billion barrels including 9.7 billion barrels of consolidated
operations and 2.3 billion barrels of affiliated operations, respectively. This included 6.8 billion barrels of liquids
reserves and 31,576 billion cubic feet of natural gas operations including consolidated operations and affiliated
operations. Moreover, in FY2018, Chevron’s consolidated companies owned a total of approximately 106.3 million
acres of gross developed and undeveloped crude oil and natural gas properties (including affiliates) across the globe.
Additionally, the company’s consolidated companies and affiliates owned 43,362 net productive oil wells. The
company sells natural gas and NGLs from its producing operations and also makes third-party purchases and sales of
natural gas and NGLs. During FY2018, the US and international sales of natural gas were 3.5 Bcf and 5.6 Bcf per day,
respectively, which includes the company's share of equity affiliates' sales. Further, the US and international sales of
NGLs were 184,000 and 96,000 barrels per day, respectively, in FY2018. Substantially all of the international sales of
natural gas liquids from the company's producing interests are from operations in Angola, Australia, Canada,
Indonesia, Nigeria and the UK. In FY2018, the Upstream segment reported revenue of US$60,713 million, which
accounted for 31.7% of the company's total revenue.
Industry Profiles
The All Other segment consists of worldwide cash management and debt financing activities, corporate administrative
functions, insurance operations, real estate activities, and technology companies. In FY2018, the All Other segment
reported revenue of US$1,044 million, which accounted for 0.6% of the company's total revenue.
Industry Profiles
Industry Profiles
Industry Profiles
Industry Profiles
Industry Profiles
TOTAL S.A. (TOTAL or the 'company') is an integrated oil and gas companies in the world. The company is engaged in
all aspects of the petroleum industry, including upstream and downstream operations. It is also active in the
chemicals, coal mining, and power generation businesses. It provides fuels, lubricants, bitumen, natural gas, special
fluids and fuel additives and chemical products. It caters to the consumers in several industries such as automotive,
transportation, aerospace, housing, energy and manufacturing industries. The company has business presence in
Africa, Middle East, Asia-Pacific, North & South America and Europe. TOTAL is headquartered in Courbevoie, France.
The company reported revenues of (US Dollars) US$176,249 million for the fiscal year ended December 2019
(FY2019), a decrease of 4.3% over FY2018. In FY2019, the company’s operating margin was 9.2%, compared to an
operating margin of 9% in FY2018. In FY2019, the company recorded a net margin of 6.4%, compared to a net margin
of 6.2% in FY2018. The company reported revenues of US$38,577 million for the first quarter ended March 2020, a
decrease of 11.1% over the previous quarter.
Head office: Tour Coupole - 2 place Jean Millier Paris-la-Defense, PARIS, France
Telephone: 33147444546
Fax: 33147447878
Number of Employees: 104460
Website: www.total.com/
Financial year-end: December
TOTAL S.A. (TOTAL or the 'company') is a France based energy company, engaged in the exploration and production of
oil and gas, including transportation, refining, petroleum product marketing, and international crude oil and product
trading. The company operates in more than 130 countries.
The company operates through four business segments: Refining and Chemicals; Marketing and Services; Gas,
Renewables and Power; and Exploration & Production.
TOTAL's Refining and Chemicals segment is the company's major industrial component, encompassing refining,
petrochemicals, and specialty chemicals operations. It also includes crude oil trading and shipping activities. TOTAL's
refining business has equity stakes in 19 refineries (including nine operated by companies of the company), located in
Europe, the US, Africa, the Middle East and Asia. The company’s refined products principally consist of gasoline,
distillate and fuel produced by its refineries. As on December 2018, TOTAL's worldwide refining capacity was 2.0
Mb/d. The chemicals business is organized into the base chemicals division (petrochemicals and fertilizers) and the
specialties chemicals division (including rubber processing, resins, adhesives, and electroplating activities). In FY2018,
the Refining & Chemicals segment reported revenues of US$92,025 million, which accounted for 44% of the
company's total revenue.
The Marketing and Services segment includes worldwide supply and marketing activities in the oil products and
services field as well as the activity of New Energies. It is involved in supplying and marketing petroleum products
Industry Profiles
(service station activities for light vehicles and trucks; and general trade in automotive fuels, fuel oil, lubricants, LPG,
and asphalt, among others). The segment is also involved in developing solar energy and biomass. In energy storage
business, TOTAL has 100% stake in Saft Groupe, which is specialized in the design, manufacture and marketing of high
technology batteries for industry. It also develops batteries for space and defense using its lithium-ion technologies,
which are also deployed in the domains of energy storage, transport and telecommunications networks. In FY2018,
the Marketing & Services segment reported revenues of US$90,206 million, which accounted for 43.1% of the
company's total revenue.
Gas, Renewables and Power segment comprises of gas activities conducted downstream of the production process
and concern natural gas, LNG and LPG, and power generation and gas trading. It consists of infrastructure companies
that include regasification terminals, gas liquefaction plants and power plants, and natural gas transportation and
storage. In FY2018, the Gas, Renewables and Power segment reported revenues of US$16,136 million, which
accounted for 7.7% of the company's total revenue.
The Exploration & Production segment includes the company's exploration, development, and production activities,
and also its gas and power operations. The company has exploration and production activities in more than 50
countries and produces oil or gas in approximately 30 countries. TOTAL's gas and power division conducts
downstream activities related to natural gas, liquefied natural gas (LNG), and LPG, as well as power generation and
trading, and other activities. The upstream business segment also includes the gas and power division which
encompasses the marketing, trading, and transport of natural gas and LNG, LNG re-gasification and natural gas
storage, and LPG shipping and trading. In FY2018, the Exploration & Production segment reported revenues of
US$10,989 million, which accounted for 5.2% of the company's total revenue.
Geographically, the company classifies its operations into five segments: France, North America, Africa, Rest of Europe
and Rest of the World. In FY2018, Rest of Europe accounted for 47.5% of the company's total revenues, followed by
France with 22.8%; Africa with 10.6%; North America with 10.6%; and Rest of the World with 8.4%.
Industry Profiles
Industry Profiles
Industry Profiles
PTT Public Company Limited (PTT or 'the company') is a fully integrated national petroleum and petrochemical
company. The company is engaged in petroleum exploration and production, natural gas, refining, oil marketing and
international trading, petrochemicals businesses, and other related businesses. The company produces various
products including fuel products, Lubricants, industry products, polymer products, and Byproducts. PTT has its
operations across Asia, Middle East, Australia and Canada. The company is headquartered in Bangkok, Thailand.
The company reported revenues of (Baht) THB2,219,738.7 million for the fiscal year ended December 2019 (FY2019),
a decrease of 5% over FY2018. In FY2019, the company’s operating margin was 8%, compared to an operating margin
of 10.2% in FY2018. In FY2019, the company recorded a net margin of 4.2%, compared to a net margin of 5.1% in
FY2018. The company reported revenues of THB483,567 million for the first quarter ended March 2020, a decrease of
13.7% over the previous quarter.
555 Vibhavadi Rangsit Road Chatuchak, Bangkok (Krung Thep Maha Nakhon),
Head office:
Thailand
Number of Employees: 26613
Website: www.pttplc.com
Financial year-end: December
Ticker: PTT
Stock exchange: Stock Exchange of Thailand (Bangkok)
PTT Public Company Limited (PTT or 'the company') is an integrated energy company, engaged in the marketing and
trading of crude oil and refined petroleum products. The company is mainly involved in the exploration, development,
and production of natural gas; condensate and crude oil procurement through a subsidiary, PTT Exploration and
Production Public Company (PTTEP); transmission, processing, marketing,; and distribution of natural gas and gas
products; and marketing of refined products through various distribution channels in domestic and international
markets. The company has operations in Thailand, Myanmar, Malaysia, Vietnam, Cambodia, Indonesia, Oman, Algeria,
Mozambique, Kenya, Australia, New Zealand, and Canada. PTT is a state enterprise and falls under the scope and
supervision of the Ministry of Finance, Thailand.
PTT conducts its operations through seven business segments: Petrochemical and Refining, Oil, International Trading,
Natural Gas, Petroleum Exploration and Production, Coal, and Others.
PTT’s Petrochemical and Refining segment’s business include fuel processing, production and sale of upstream,
intermediate, and downstream such as petrochemicals together with various polymers, worldwide marketing
business, and integrated logistics services. The segment is operated through nine group companies, namely Thaioil
(TOP), IRPC (IRPC), Star Petroleum Refining (SPRC), Bangchak (BCP), PTT Global Chemical (PTTGC), HMC Polymers
(HMC), PTT Asahi Chemical (PTTAC), PTT MCC Biochem (PMBC), PTT PMMA, PTT Polymer Marketing (PTTPM), and PTT
Polymer Logistics (PTTPL). The company conducts refining business including the production and distribution of
petroleum and petrochemicals products in both domestic and overseas markets. In FY2018, the Petrochemical and
Industry Profiles
Refining segment reported revenues of THB673,931.6 million, which accounted for 28.8% of the company's total
revenue.
The Oil segment conducts marketing of petroleum products and lube oil in both domestic and overseas markets under
an efficient operating system of procurement, storage, and distribution of products as well as the retail business at
service stations. The segment is in charge of distribution of quality petroleum products, which break down into three
core products including: liquid fuels and liquefied petroleum gas (LPG), as well as lubricating oil and other lubricating
products, and non-oil business products. All these are sold through three major distribution channels.
Firstly, PTT Retail Marketing provides products and services to consumers, through service stations and outside,
marked by quality development of products and services under the PTT Life Station concept to satisfy modern
consumers’ lifestyles that favor one-stop service. In addition, new retail businesses are conceived and operated by PTT
and business allies. Second, through PTT Commercial Marketing, fuel and lubricant products as well as other related
petroleum products are distributed to civil servant groups, state enterprise workers, industries, aircraft, ocean liners,
and fishing vessels for their businesses and exports. Finally, sale of products to customers under Article 7 and Article
10 of the Fuel Trade Act. Moreover, the business unit manages investments in businesses and services that are related
to domestic and overseas businesses through PTT Group companies, most of which are wholly owned by PTT, such as
retail sales and service stations, lubricating oil blending and bottling, and the business of receiving, storing and
dispensing fuel products and petrochemicals. In FY2018, the Oil segment reported revenues of THB594,808.2 million,
which accounted for 25.5% of the company's total revenue.
The International Trading segment conducts international trading business including the import and export of
petroleum and petrochemical products as well as other related products. This includes the management of risks
arising from oil trading and the procurement and distribution of petroleum and petrochemical products in
international markets. The segment operates fully integrated international trading businesses to enhance national
energy security in tandem with the expansion of trading bases to all regions of the world. This segment covers
procurement, import and export of crude oil, condensate, petroleum products, LPG, petrochemical products, to
solvents and chemicals, and crude palm oil and palm kernel shells. This segment is also in charge of providing price
risk management and shipment in support of businesses.
The segment posted a total of 58,309 million liters of trading volumes of petroleum and petrochemical products in
FY2018.
The Infrastructure and Sustainability Management business group engages in natural gas delivery system (natural gas
transmission and NGV delivery system), power and cogeneration business, land development business, standards and
operating systems for sustainability business, engineering and construction project management services, engineering
and maintenance services, and office building service to maximize the efficiency of infrastructural asset management
and promote professional project management excellence to accommodate PTT’s domestic and overseas business
growth.
In FY2018, the International Trading segment reported revenues of THB661,512.2 million, which accounted for 28.3%
of the company's total revenue.
The Natural Gas segment conducts natural gas business including procurement, natural gas pipeline transmission,
distribution, and natural gas separation. The company’s products from the natural gas separation plants are used as
feedstock for the petrochemical industry and as fuel in the household, transportation and industry sectors. In FY2018,
the Natural Gas segment reported revenues of THB346,496.1 million, which accounted for 14.8% of the company's
total revenue.
The Petroleum Exploration and Production segment operates both domestically and overseas through PTTEP. The
company is the operator and jointly invests with leading petroleum exploration and production companies. Most
domestic projects are located in the Gulf of Thailand. Overseas projects are located in Asia Pacific, North America,
Africa and the Middle East. PTT operates petroleum business through investments in subsidiaries, joint ventures, and
associates (PTT Group), which are engaged in upstream and downstream petroleum, coal, and power and
infrastructure businesses. PTT is engaged in the power business through Global Power Synergy (GPSC), its power
flagship. The company produces public utilities (electricity, steam, and demineralized water) for industrial users and
Electricity Generating Authority of Thailand (EGAT). In FY2018, the Petroleum Exploration and Production segment
reported revenues of THB24,848.9 million, which accounted for 1.1% of the company's total revenue.
The Coal segment conducts coal mining business, involving overseas exploration, production and distribution of coals.
It operates through its wholly owned company, PTT Energy Resources (PTTER), which invests in the coal mining
Industry Profiles
business in Indonesia and Madagascar, together with a joint venture investigation of coal potential in Brunei. It
conducts coal mining business, involving overseas exploration, production and distribution of coals. PTTER invests in
coal business and coal mining business in Indonesia through Sakari Resources Limited (SAR), which produces and sells
primarily to Asian countries, including Hong Kong, Taiwan, Korea, Japan, China, Malaysia, Indonesia, and Thailand. SAR
also procures coal produced by other miners to blend with coal from the Jembayan mine to meet the specifications
demanded by customers. In FY2018, the Coal segment reported revenues of THB20,527.2 million, which accounted for
0.9% of the company's total revenue.
The Other segment includes the company's various other subsidiaries, including Business Services Alliance Co., Energy
Complex Co., PTT ICT Solutions Co., Dhipaya Insurance Public Co., and PTT Regional Treasury Center. In FY2018, the
others segment reported revenues of THB14,030.7 million.
Industry Profiles
Industry Profiles
Industry Profiles
Industry Profiles
9. Macroeconomic Indicators
Industry Profiles
Industry Profiles
Appendix
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-
checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases
provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company
profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market
overview
Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of
each definition are carefully reviewed at the start of the research process to ensure they match the requirements of
both the market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and
trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data
to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which
can then be refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date
Industry Profiles
Industry Profiles
About MarketLine
In an information-rich world, finding facts you can rely upon isn’t always easy. MarketLine is the solution.
We make it our job to sort through the data and deliver accurate, up-to-date information on companies, industries
and countries across the world. No other business information company comes close to matching our sheer breadth
of coverage.
And unlike many of our competitors, we cut the ‘data padding’ and present information in easy-to-digest formats, so
you can absorb key facts in minutes, not hours.
What we do
Profiling all major companies, industries and geographies, MarketLine is one of the most prolific publishers of business
information today.
Our dedicated research professionals aggregate, analyze, and cross-check facts in line with our strict research
methodology, ensuring a constant stream of new and accurate information is added to MarketLine every day.
With stringent checks and controls to capture and validate the accuracy of our data, you can be confident in
MarketLine to deliver quality data in an instant.
For further information about our products and services see more at: http://www.marketline.com/overview/
Disclaimer
All Rights Reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means,
electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher,
MarketLine.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note
that the findings, conclusions and recommendations that MarketLine delivers will be based on information gathered
in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee.
As such MarketLine can accept no liability whatever for actions taken based on any information that may
subsequently prove to be incorrect.