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Nido Bangchak’s first step to head upstream
2014

The Thai oil refiner and marketer bidding $113 million for Nido Petroleum has hinted the take- over could be the first in a series as it establishes a sizeable upstream business in the Australia and South-East Asia region.

Bangchak Petroleum, Thailand’s second-biggest petrol station operator, also said it was likely to retain Nido’s Perth office and most of the company’s management and operational team, including chief executive Phil Byrne, as a foundation for its upstream ambitions.

But Bangchak ruled out bidding for the Montara oil and Cash-Maple gas fields in the Timor Sea that have been put up for sale by its own biggest shareholder, PTT.

“It definitely is too big for us to swallow,” Bangchak director Chaiwat Kovavisarach said yesterday during a whirlwind first visit to Perth with the company’s president, Vichien Usanachote.

“I don’t think we want to go up for something too big for us.”

“(But) we are looking to invest abroad and for us to be a real energy player we have to be upstream. It is one step at a time.”

“We look at Nido as a platform and believe in its management and they have a balanced (asset) portfolio. If this deal achieves (our goals), then we go for the next step.”

Bangchak is offering 5.5¢ for Nido shares, which yesterday closed at 5.1¢.

The friendly bid has the support of Nido’s board while Bangchak, advised by Sydney boutique Record Point, already owns 19.7 per cent of the target.

Despite the hydrocarbon potential in South-East Asian waters and Perth companies’ prominent positions there, they have struggled to deliver on the promise and in the process lost investor support.

The Nido deal is Bangchak’s first outside of Thailand and comes amid a flurry of corporate activity in Australia’s listed mid-tier oil and gas sector at a time when share prices are weak.

Bangchak’s Nido offer was priced at a 70 per cent premium to the target’s three-month volume-weighted average price.

The Thai group’s emergence as a player with corporate interest will focus further attention on some of Nido’s peers.

Nido’s best asset is a stake in the Otto Energy-run Galoc oil field off the Philippines while Thai entrepreneur Chatchai Yenbamroong, who sold his Nido stake to give Bangchak the takeover platform, is an investor in Tap Oil as well as Tap’s flagship Manora oil project off Thailand.

The West Australian
Business
Peter Klinger