PTT expects to begin generating income from its US$275-million (Bt9.56 billion) acquisition of US-based ConocoPhillips' Jet petrol stations and Jiffy retail business in the third quarter, said company president Prasert Bunsumpun.

PTT yesterday signed the purchase deal, which takes effect on June 27. PTT is also entitled to use the Jet and Jiffy brands for two years. "This purchase will allow us to stop expanding large petrol stations. The Jet stations will be maintained as premium stations, while PTT stations which are located near the Jet stations could be converted to sell other products such as natural gas for vehicles," Prasert told reporters.

US oil major ConocoPhillips yesterday vowed to seek business opportunities in Thailand despite its exit from the retail petrol market, where it has operated since 1993.  "We will explore opportunities to work together in the future," Gary Freiberger, general manager of ConocoPhillips' Asia-Pacific downstream operations, told a joint news conference with PTT. The deal will involve the establishment of a wholly owned subsidiary of PTT for the acquisition from ConocoPhillips' subsidiaries - Conoco (Thailand), Jet/Jiffy Shops, Siam Conoco Terminal and Siam Conoco Land.

Prasert said Jet had the highest sales volume per station last year, averaging about 600,000 litres a month, against about 400,000 litres at PTT stations.

Despite comments that the price of about Bt70 million per station is too high, Prasert said it was a worthwhile investment. "If we invest by ourselves, we have to spend Bt50 million to Bt100 million for each big-sized station and take at least five years to reach 100 stations. How could we find proper locations to do all that?"

PTT will also benefit from Jet's 3,350 skilled staff and its client network. Jet stations - all in good locations - will increase PTT's market share from 34 per cent to 38-39 per cent. PTT's network expanded though its retail business and lost more than Bt1 billion last year due to low marketing fees. Meanwhile, Chaiwat Chooritti, senior executive vice president of PTT's oil business group, said PTT planned to shut down 50-60 low-profit stations.

Chalida  Ekvitthayavechnukul

The Nation