Thai Oil Public Company Limited (Thaioil) has revealed its 2025 business strategy, focusing on sustainable growth despite anticipated challenges in both domestic and[...]

Thaioil Reveals 2025 Business Strategy and
Expedites Clean Fuel Project (CFP) Management

Thai Oil Public Company Limited ("Thaioil") has revealed its 2025 business strategy, focusing on sustainable growth despite anticipated challenges in both domestic and international energy and petrochemical markets. Thaioil remains confident in its long-term growth potential and opportunities, particularly through the expedited management of the Clean Fuel Project (CFP), which will serve as a crucial foundation for strengthening the company and ensuring national energy security.

Mr. Bandhit Thamprajamchit, Chief Executive Officer and President, Thai Oil Public Company Limited, stated, "Despite ongoing volatility in the global and Thai economies, there are positive factors that will benefit the energy and refinery industries in 2025. Jet fuel demand is expected to increase due to growth in commercial flights, especially in Asia, where tourism continues to rise in the wake of the COVID-19 pandemic. Thaioil holds the highest market share in this segment, approximately 50%. Diesel demand is also projected to increase due to economic growth in Asia. While gasoline demand continues to grow, it may face pressure from the supply of new refineries set to begin operations next year, potentially leading to some recovery in refining margins in 2025. Overall, this is expected to be a positive factor for the refinery business in the long term."

To address challenges and seize growth opportunities, Thaioil has defined four key strategies for 2025:

Strengthen Refinery Business and Expedite the Clean Fuel Project (CFP): Thaioil prioritizes the CFP as the key to its long-term strength. The company is also implementing new technologies for productivity improvement to enhance competitiveness and control costs.

The CFP has achieved its first success with the trial run of the diesel Hydrodesulfurization Unit (HDS-4) in order to enhance production of the Euro 5 diesel fuel standard since February 2024. This supports the government's policy of promoting more environmentally friendly fuels, starting in early 2024. The CFP is currently under construction, with major equipment already delivered to the site since late 2023. The fourth Crude Distillation Unit (CDU-4) is progressing faster than other parts. Meanwhile, the Residue Hydrocracking Unit (RHCU), which upgrades fuel oil and asphalt into jet fuel and diesel, is currently undergoing equipment installation and piping connection. Due to its complexity and limited space, progress on this unit is slower than others.

Value Chain Extension: Focus on developing high-value products for various industrial applications to meet evolving market demands. This includes collaborating with domestic and international partners to expand distribution channels and penetrate high-potential markets such as Vietnam, Indonesia, and India. Of particular note is the expansion of the Disinfectant & Surfactants (D+S) chemicals business, which plays a significant role in the high-growth cleaning products and infection control market. Pursuant to the TOP for The Great Future initiative, Thaioil is also exploring new businesses with PTT Group and other partners, such as bio-surfactants, blue/green hydrogen, bio-jet fuel, and Carbon Capture, Utilization, and Storage (CCUS).

Financial Strength: Prioritize efficient cost and expense management, along with prudent commodity price and foreign exchange risk management. This aims to maintain financial liquidity and investment-grade credit ratings to help build investors' confidence.

Drive for Sustainability: Commitment to sustainable business practices, considering Environmental, Social, and Governance (ESG) factors. Focus on improving energy efficiency to reduce greenhouse gas emissions and creating value for society and communities through various projects, such as promoting education, job creation, and access to healthcare in remote areas.

We are confident that these four strategies will enable Thaioil to overcome challenges and achieve sustainable long-term growth, delivering appropriate returns to shareholders and ensuring Thailand's energy security, added Bandhit.

Nevertheless, Thaioil is concerned about the current situation where subcontractors of the UJV - Samsung E&A (Thailand) Co., Ltd. ("Samsung"), Petrofac South East Asia Pte. Ltd. ("Petrofac"), and Saipem Singapore Pte. Ltd. ("Saipem") have reached a joint resolution to not continue with the construction of the CFP unless the UJV - Samsung, Petrofac, and Saipem settle all overdue payments. Thaioil acknowledges the hardship faced by the unpaid subcontractors and has consistently sent letters urging UJV - Samsung, Petrofac, and Saipem, as well as their parent companies, to pay the overdue payments to the subcontractors, as it is their responsibility according to the terms of the subcontracts.

Both Thaioil and the subcontractors are affected by the breach of contract by UJV - Samsung, Petrofac, and Saipem. Therefore, expediting CFP management is a top and urgent priority. Thaioil is committed to completing the CFP as quickly as possible and is closely monitoring the situation. The company is assessing the impact on the project timeline, costs, and the business ecosystem, and is implementing measures to mitigate damages. Thaioil is also carefully preparing appropriate actions to expedite the completion of CFP, prioritizing the best interests of the company and its shareholders. Currently, it is expected that there would be more clarity on this matter in early 2025. While the

subcontractors' claims for overdue payments from UJV - Samsung, Petrofac, and Saipem are impacting the time for completion of CFP, the commencement of the commercial operation of the CFP will not be indefinitely postponed.

Despite the obstacles and challenges, Thaioil remains committed to completing the CFP as quickly as possible to enhance competitiveness, create added value for the business, and strengthen Thailand's long-term energy security and economic development.