Kiatnakin Phatra Securities (KKPS) notes in its report, citing information from ‘Kaohoon’, that Thai Oil Public Company Limited (SET: TOP) has named Wood PLC as the engineering, procurement, and construction management (EPCM) contractor for its Clean Fuel Project (CFP) as the company embarks on a new phase of project supervision after recent setbacks.
The shift from a traditional engineering, procurement, and construction (EPC) contract to the EPCM model means Wood PLC will oversee and manage the CFP, rather than delivering the project on a turnkey basis. Under this arrangement, Thai Oil will retain direct responsibility for project budgets, as well as for hiring and managing EPC contractors and subcontractors.
The company is currently in the process of selecting new EPC contractors after terminating its contract with the UJV consortium over construction delays and cost overrun disputes. Bechtel International and Japan’s JGC Corporation were mentioned as the leading contenders for the role, with a final selection expected in the third quarter of 2025.
Notably, Bechtel has served as a consultant on the CFP from the outset. Under the revised structure, new EPC contractors will be insulated from ongoing legal disputes between UJV and its subcontractors; most subcontractors are expected to be retained for the next project phase.
In recent developments, Stecon Group Public Company Limited (SET: STECON) announced a new CFP contract with Thai Oil valued at 7.4 billion baht ($224 million) for structure, mechanical, and piping works, with construction spanning 20 months from June 2025.
Sriracha Construction Public Company Limited (SET: SRICHA) has also secured a similar package worth 7.8 billion baht ($236 million) for a 19-month period starting June 2025. Both companies previously worked on the project under UJV and are now returning as subcontractors.
Financially, Thai Oil exercised the final UJV performance bond in the second quarter of 2025, valued at $122 million, bringing total bond proceeds to $440 million, funds used to help offset the sizeable $1.8 billion cost overrun.
The CFP’s risks have been a significant weight on Thai Oil’s share valuation, dragging its price-to-book ratio to 0.4x—well below its historical floor of 0.8x.
However, the resolution of major milestones — including reclaimed bond proceeds, resumption of CFP, and the appointment of new contractors — combined with improved Singapore gross refining margins, may help restore investor confidence and trigger a re-rating process.
As a result, KKPS maintains a ‘Buy’ recommendation for Thai Oil, with a target price set at 38.20 baht per share, and forecasts the company’s net profit at 13.86 billion baht in 2025, rising to 15.46 billion baht in 2026 and 18.91 billion baht in 2027.
