A source from the refinery construction industry revealed to “Kaohoon” that Thai Oil Public Company Limited (SET: TOP) is preparing to invite three major Thai contractors—such as Stecon Group Public Company Limited (SET: STECON), Nawarat Patanakarn Public Company Limited (SET: NWR), and Unique Engineering and Construction Public Company Limited (SET: UNIQ)—to discuss moving ahead with the Clean Fuel Project (CFP). This comes after the appointment of Wood PLC as the Procurement & Construction Management (EPCM) firm to oversee the entire CFP, aiming for commercial operations to begin in Q3/2028.
Refining Margins Rebound Sharply
Mr. Nuttapol Nopparatwong, Vice President-Commercial Planning at Thai Oil, stated that the Q2/2025 outlook is expected to improve continually from the previous year. This recovery is supported by the US driving season, which typically boosts demand for gasoline and jet fuel. In addition, the shutdown of several refineries has tightened market supply, leading to higher product spreads and indicating a rebound, particularly noticeable in May-June 2025.
Looking ahead, the refinery market is expected to further recover for the remainder of this year, as both European and US refineries are slated for several closures, collectively amounting to millions of barrels per day. This will reduce overall supply and may lead to an increase in Singapore’s Gross Refining Margin (GRM).
Krungsri Securities expects that Thai Oil will benefit in H2/2025 from new positive factors. The selection of a main contractor helps alleviate CFP project overhang. Meanwhile, profit recovery comes from fewer stock losses and a rebound in refining margins. Over the longer term, refinery operations will continue to provide steady cash flow, alongside potential upside from lower-than-expected incremental CFP costs should the company win further disputes (currently, over 91% of guarantees have been claimed).
As of May 26, Singapore GRM increased for three consecutive sessions, reaching USD 7.4 per barrel—a positive sentiment for refinery stocks.
Kasikorn Securities noted that a fire at the fuel oil tank at Esmeraldas—the largest refinery in Ecuador operated by Petroecuador—has been brought under control according to the energy minister. This is considered a minor positive sentiment for refining margins and refinery groups including Thai Oil, Star Petroleum Refining (SET: SPRC), Bangchak Corporation (SET: BCP), and Bangchak Sriracha (SET: BSRC).
Interest Cost Reduced by THB 1.7 Billion
Mr. Bandhit Thamprajamchit, CEO and President of Thai Oil, disclosed through the Stock Exchange of Thailand (SET) that regarding the company’s unsecured and unsubordinated debentures totaling USD 600 million (approximately THB 19,560.30 million as of May 26, 2025, at an exchange rate of 32.60 baht to the dollar), with a fixed interest rate at 5.375% per annum and maturing in 2048. These were issued and sold to foreign institutional investors in November 2018 by Thai Oil Treasury Center Company Limited (TTC), a 100% subsidiary in which Thai Oil holds all shares, and the company fully guarantees these debentures.
Thai Oil Treasury Center (TTC) has repurchased and cancelled a portion of these debentures amounting to USD 43 million (about THB 1,401 million) on the secondary market, leaving an outstanding balance of USD 557 million (approx. THB 18,158.48 million) as of May 26, 2025.
This early redemption and cancellation reduces interest expenses by around THB 1.73 billion, calculated from the principal repurchased (THB 1,401.82 million) at a fixed rate of 5.375% per annum until maturity in 2048.
According to LSEG consensus, Thai Oil’s net profit for 2025 is projected at THB 10,567.84 million, up 6.12% year-on-year.
