Frequently asked questions about Bangchak .
What is the condition of guaranteed principal value of BCP-DR1?

BCP-DR1 (Depository Receipt) is guaranteed with the principal value at 13 Baht by the Ministry of Finance (MOF) of Thailand. If stock price is lower than 13 Baht in 2014 (The term of BCP-DR1 is 10 years which will be expired on February 2, 2014), holders can resell BCP-DR1 back to MOF.

However, the guarantee will be expired right after BCP-DR1 is converted to ordinary shares of BCP. Holders can exercise their rights every quarter or if BCP-DR1 price is higher or equal 20.80 Baht for 15 business days. BCP-Dr1 will be automatically converted to BCP. In that case, the MOF guaranty will be lifted. In addition, BCP-DR1's holders will receive dividend as the common shares - BCP.

Will holders who didn't buy BCP-DR1 at IPO receive guaranteed principal value at 13 Baht?

Such guarantee will be offered to BCP-DR1's holders whose named listed in closing date (around December 2013), whether holders bought BCP-DR1 at IPO, and holders have the right to guaranteed principal value at 13 Baht , or choose to convert to ordinary shares of BCP at the ratio of 1 BCP-DR1 for 1 BCP. The exact date will be informed again.

What is "BCP-DR1"?

"BCP-DR1" is the Depository Receipt for common shares of The Bangchak Petroleum Public Company Limited ("the Company") which the Company offered and issued its ordinary shares to Siam DR Co., Ltd.("Siam DR") for the purpose of being the underlying asset, which Siam DR issued The BCP-DR1 to the investors on January 29, 2004, the terms and conditions could be downloaded here

  • The term of BCP-DR1 is 10 years which will be expired on February 2, 2014.
  • The Ministry of Finance("MOF") guaranteed the principals for 10 years so that the BCP-DR1 holders are able to resell to MOF at first issue price (Baht 13*) if the price is not perform at the 10th year or anytime when the Company is liquidated.
  • The BCP-DR1 holders have the voting right same as ordinary shareholders; however, via Siam DR Co.,Ltd. and also get dividend paid.
  • The BCP-DR1 holders have the right to wholly or partly convert the depository receipts to the ordinary shares "BCP" at the ratio of 1 BCP-DR1 for 1 BCP. The BCP-DR1 holders would be able to exercise by submit the Notification Form to the office of the agent within 5 business days prior the 5th of January, April, July, and October of each year.
  • If the BCP-DR1's price is higher than or equal to Baht 20.80 for 15 consecutive business days, all BCP-DR1s will be forced convert to the ordinary shares, BCP, and the MOF guaranty will be lifted.

* Subject to the price adjustment stated in the clause 5 of Terms and Conditions

Will holder of BCP-DR1 be entitled to dividend, and is that dividend be used as a tax credit?

BCP-DR1 holder will receive dividend as announced by the company through Siam DR Co., Ltd. The dividend received will considered a normal dividend, therefore cannot be used as a tax credit for personal tax purpose. However, the security holder does not need to include such dividend in the person income as it is already subjected to 10% withholding tax.

What is BCP's dividend policy?

"the Company has the policy to pay out dividend to the shareholders at the rate of 50 percent of net profit of the Company's consolidated financial statements, depending on the economic situation and the Company's future business projects and must not violate the Public Company Act in dividend payment matter."

Will there be dividend for this year and when will the Register of Shareholders be closed?

In 2010, the Company paid dividend at 1.05 baht per share on allocating profit from retained earnings for BCP and BCP-DR1 holders. The dividend was divided into 2 parts which was the interim dividend and the dividend for year 2010 performance. The pay out dividend depends on the company's earning as well as the economic situation.

Product Quality Improvement Project (PQI)
What is "PQI" Project?

"PQI" Project is Product Quality Improvement Project which adding on "Hydro-cracking" and its related facilities to the existing facilities. The objective of the project is to convert low-value fuel oil which currently at 30% of production to high-value products such as Gasoline and Diesel. The Company's performance will be improved to the same region other "complex" refineries. The Project cost is about USD $ 378 Million or equivalent to Baht 14,762 Million. The project has already completed on December 7, 2009

How significantly can Product Quality Improvement project (PQI) improve company's performance?

PQI will enable the company to transform low-yield fuel oil into other higher yield products. Upon completion, fuel oil proportion should be reduced from 30% to only 9%, while the remaining will become higher-yield benzene and diesel. Therefore, the refinery margin will be improved from US$2-3/barrel to US$6-8/barrel, which should significantly improve company's performance. EBITDA should improve from Bt2.0bn to Bt6-8.0bn.

Does Product Quality Improvement project (PQI) increase the production capacity?

Presently Bangchak's refinery plant has production capacity of 120,000 barrels per day. PQI includes building new cracker unit next to the current unit that has a capacity of 30,000 barrels/day and solely yields the entire fuel oil production. Therefore, the total production capacity will remain the same, but is capable of producing more high-priced products such as diesel and benzene and less of fuel oil yield. After the PQI project is completed, the Company plans to run at 100,000 barrels/day which is the optimal level that will generate the highest return.

What is the budget allocated to the PQI projectand will it be over the budget?

PQI total project value is worth approximately THB 14,800 million where the funds come from 2 sources: 1) bank loan amounting to THB 8,400 million and 2) raising from capital market by increasing share capital.

PQI employs a turnkey lump sum project contract which is a lump sum basis that project cost amount has been specified in the beginning and no additional expense will be incurred to the Company for work within the agreed scope. overspend the budget.

After operating PQI, what will the GRM be?

Before PQI Project completion, the Company had Base GRM, excluding gain/loss from inventory at USD 2-4/barrel, depending on the difference between crude oil price and finished products price at various points in time. After operating PQI, the Company will be able to achieve yields of higher-priced products resulted in higher GRM, more or less depending on the spread between the price of crude oil and that of particular finished product at the time. In 2011. The company has projected GRM to be around USD 5.5-6 per barrel which is the conservative estimation.

After the PQI project is completed and the Company could produce more diesel and gasoline. What is the plan to handle?

Upon the completion of PQI project, the Company could produce an additional of 135 million liters of diesel and gasoline per month (assumed run at 100,000 barrels per day). However, the Company has entered into a long-term contract to sell 30% of production to PTT Public Company Limited, which is a condition required by PTT Plc. when acquiring additional stakes to fund PQI project.

Cogeneration Project
What is a Cogeneration?

The Cogeneration is a power plant that can generate both electricity and steam using natural gas as fuel source. We have reached agreement with PTT to allow PTT to invest and construct the cogeneration plant with capacity of 19.7 MW electricity power and 90 tons of steam per hour in BCP refinery area. The contract stipulates that PTT shall operate and distribute exclusively to the Company and using the price equivalent to SPP while the ownership rights shall be transferred to the Company after the end of 25 years term. The project is expected to complete in 2009.

When is the completion of the Cogeneration project?

The Cogeneration plant has commercially operated since June, 2010.

What are the benefits of the Cogeneration project?
  • The Cogeneration will increase efficiency and reliability of plant utility by it would require less power from Metropolitan Electricity Authority (MEA).
  • The Company will be able to save investment cost to otherwise install additional boiler required to generate back up steam demand.
  • Utilities generated from Cogeneration are economically cheaper in costs than those generated from current plants which are mostly Steam Turbine Generator type that have been there for more than 30 years. Moreover, Cogeneration uses natural gas, which is a cheaper fuel cost and has better efficiency than fuel oil.
ASEAN Potash
What is the reason of investment in ASEAN Potash mining?

The main reason of ASEAN Potash investment is to diversify the company's portfolio to other business in order to reduce the revenue volatility from oil price fluctuation.

What is the investment proportion and investment value of ASEAN Potash mining?

The company totally invests 79 Million Baht which is accounted for 6.56% of total paid-up capital. The investment is made by acquiring the share from TMB bank.

Why does TMB sell ASEAN Potash share to BCP?

TMB Bank has been restructured its shareholders' structure. Therefore, it has an effect on the shareholders' proportion on Potash Mining to be 16.56%. However, the commercial bank policy does not allow any commercial bank to hold share of any limited company above 10%. Therefore, it is necessary for TMB bank to reduce its investment proportion.

How is the shareholders' structure of ASEAN Potash?

Marketing Business
Currently, Thai government has promoted campaign on alternative energy; does Bankchak have any innovation on new products on that issue?

The company continuously expand the alternative energy market not only by increasing the number of alternative energy's service station but also keep launching new products such as E20 and E85.

How is the chance of the company to expand its marketing business since it generates negative earning?

The marketing business doesn't always generate negative earning to the company. In the long-term, it is more beneficial to have its own marketing channel because it is a secure demand as well as it is one of the company's distribution channel.

What is the Bangchak E85 ?

Bangchak E85 is an ethanol fuel blend of up to 85% of ethanol and gasoline.

How many gas stations does Bangchak currently have?

Now as of May, 2011, The company currently has total gas station of 1,064 service which 509 are oil station and 550 are cooperative service station.

What is the Bangchak Self-service Gas Station?

It is the gas station that customers can fill up gasoline by themselves. The gas station is controlled by computer. The Bangchak self-service gas station is standardize similar to those in developed countries.

Where can I find Bangchak Self-service Gas Station?

Now as at June 2008, the Company has 10 Self-service gas station.

1. Suthisarn Branch Between Phahon Yothin Road and Vibhavadi Road Bangkok
2. Maiyalarb Branch Between New Kasead Road and Ramintha Road Bangkok
3. Udomsuk Branch Between Sukhumvit Road and Srinakarin Road Bangkok
4. On-Nut - Ladkabang Branch 1 Km. form Prawiet Market Bangkok
5.Lad Phrao 98/1 Branch Soi Lad Phrao 98/1 Opposit of Imprerial Lad Phrao Bangkok
6. Bangchak City Branch Sedtakit Villa (Wong Vient U-Thong) Bangkok
7. Phahon Yothin 48 Branch Soi Phahon Yothin 48 Bangkok
8. Raywadee Branch Soi Reywadee exiting to Sanambin Nam Nonthaburi
9. Charoenmuang Branch Nearby Amphur Muang Train Station Chiangmai
10. Rat Chiang Sand Bra Opposti of Ka Tum Shallow Lake, Amphur Muang Chiangma
Is there any NGV available for sale at Bangchak?

Bangchak has cooperated with PTT to expand NGV service station in order to promote alternative energy consumption. PTT will invest in all NGV equipments at Bangchak service station.

What is the Euro IV Standard?

Euro or European Emission Standard defines the acceptable limits for exhaust emission of new vehicle sold in EU members. The standard was started with Euro I until 2005 when Euro IV is compulsory for all gas station. However, Bangchak has early adopted Euro IV standard. So that Thai people can use the diesel that is cleaner for the environment.

Which country that already adopted Euro IV standard?

All countries in EU, Australia, New Zealand, Japan, Hong Kong, Singapore, Taiwan and etc.

Which diesel engine Bangchak Euro IV super power D B5 is eligible for?

Bangchak has developed Euro IV super power D B5 that can be used in all diesel engine.

What is the cooperative service station?

The idea of cooperative service station is to enhance a chance for earning distribution to farmer in remote area, rural community and agricultural cooperation by allowing those people to manage gas station by themselves.

Solar Farm
Does the company invest in solar farm and how is the project progress ?

The company has already signed PPA with PEA and EGATT to sell electric power for 118 MW. Currently, the solar farm phrase 1 (38 MW)is under construction and expected to complete in Q4/2011. The company has planned to complete all 118 MW solar power plant within 2 years.

What are the risks involved in solar power business and what are the plans to mitigate those risks?

One of the risks that we concern is the climate condition. However, the company has designed and installed the solar panels to match with the solar irradiation of area.

What are the reasons that the company invest in ethanol business?

Ethanol business is accounted for one of the supported business for Bangchak because the company has a plan to moving toward to alternative energy. Therefore, ethanol business will be the source of the company raw material as well as the company can diversify the risk to other business.

How is the Bangchak investment on ethanol business?

There are 2 acquisitions of ethanol business.

  1. Ubon Bio Ethanol : The company has invested in UBE by acquiring 583,000 shares which is accounted for 21.28%. The total investment value is 750 million Baht. The company has invested in UBE with Thai Oil company with equally proportion.
  2. Thai Agro Energy : The company has already signed for the acquisition of TAE from LANNA Resources company for 320 million shares or 40%
What is the capacity of Ethanol business that the company has invested?

There are 2 capacitirs from the acquisitions of ethanol business.

  1. Ubon Bio Ethanol : The capacity is 400,000 liters/day from cassava. Moreover, there are 2 more sub-company.
  2. Thai Agro Energy : The capacity is 165,000 liters/day from molasses which is currently commercially operated. On the other hand, there are another capacity of 200,000 liters/day which is currently commissioning tested.
The Company could produce high proportion of fuel oil, but fuel oil has relatively low price. What does the Company plan to do?

The Company will select crude oil that provide highest GRM. During some period, the Company could acquire crude that give out low proportion of fuel oil, such as local crude, crude from Far East source or condensate. The Company also export low-sulfur fuel oil to overseas customers, which they could further refine fuel oil to gasoline and diesel. So the Company could sell those bunker oil at higher price than normal fuel oil.

Moreover, the Company has invested in PQI project, which improves oil quality, enables the Company to produce higher proportion of gasoline and diesel and reduces fuel oil yield from around 30% to 10%. The Company expect the project to be completed by the end of 2008.

What is the Company's policy on Oil Hedging?

Normally, we don't hedge more than 30% of total crude run; however it also depends on how good the price quotations are. The Company has appointed Price Risk Management Committee (PRMC) which consists of top management executives to set a policy and objectives in mitigating the risks in addition to monitoring global oil price. The meetings on such matter are held weekly.

What is BCP's major shareholder structure?

For informations Please click here

Company Structure
In what ways will the Company be affected from global oil price hike?

Since Bangchak has both refinery business and marketing business (service stations and industrial market), the Company is able to diversify business risks from oil price fluctuations better. For instance, even though oil price increase causes marketing margin to diminish as the price cannot be adjusted as quick as the rising costs, the Company earns more GRM form inventory gain.

Moreover, increase in oil price helps the Company to expand its renewable energy product line, particularly Gasohol and Biodiesel because consumers have a tendency to switch to cheaper energy than Benzene and Diesel.

What will happen to the company if oil price continue to decline?

The company has 2 major business units, refinery and marketing businesses, which will react differently on oil price movement. For refinery business, if oil prices rise, oil inventory will increase in value, resulting in gains from oil inventory, and vice versa if oil prices fell during the second half of the year. However, the core profits of refinery business are more dependent on finished products/crude spread. For the marketing business, the falling oil price will help the business as the retailing price adjustment is usually slower than falling cost, which could improve retailing margin.

Presently, consumer prefer to use more alternative fuel such as gasohol or NGV, how this trend affect the company?

While the increasing popularity of gasohol or biodiesel will reduce overall petrol consumption, the company owns distribution network and has policy to be a leader in alternative energy. The company continues to encourage selling of gasohol and biodiesel in the company's gas stations, which resulted in higher sales and service station shares. The increased usage of NGV might reduce gasoline consumption in the future as NGV is the direct substitute for gasoline. However, the company cooperates with PTT to distribute NGV at Bangchak service station, which would increase income as well. The company plan to increase numbers of gas stations distributing NGV in the future.

How can I contact investor relations at Bangchak?

There are 2 channels to contact IR

  1. IR Call center Tel 02-335-4583, 02-335-4580
  2. ir@bangchak.co.th