Bangkok: Bangchak Group has confirmed that its investment in the Phetchaburi oil depot project is both transparent and cost-effective.
According to Thai News Agency, the group clarified that BCPG's investment was conducted in full compliance with the procedures and regulations of listed companies, with transparency and approval from authorized parties. As BCPG expands its investment portfolio from renewable energy to energy infrastructure, the Phetchaburi oil depot project aligns well with the company's strategic objectives. The depot, with an annual revenue exceeding 900 million baht, has seen a significant increase in its value over the years due to infrastructure enhancements.
Bangchak Group recently addressed concerns regarding the investment purchase price and transaction structure of BCPG Public Company Limited's involvement in the "Phetchaburi Oil Depot Project" in 2022. Mr. Chaiwat Kovavisarach, CEO of Bangchak Group and President of Bangchak Corporation Public Company Limited, explained the rationale behind BCPG's decision. Due to the limitations of the Bangchak Phra Khanong refinery, which lacked a large-scale oil depot and relied on external sources, the company explored several alternatives over a decade. After evaluating options such as floating depots, leasing, and new infrastructure development, the "Phetchaburi Oil Depot" emerged as the most viable solution due to its upgraded infrastructure, including 20 storage tanks with a total capacity of 720 million liters, six additional jetties, and a robust pipeline system.
The 9 billion baht purchase price, perceived as high compared to a 3 billion baht offer in 2010, reflects the depot's enhanced infrastructure and future revenue potential. This valuation was carefully assessed by independent experts. In accounting terms, the purchase price is divided into tangible assets (buildings and oil storage tanks) worth approximately 6,490 million baht, intangible assets (value of oil storage facility service contract) at 1,900 million baht, and tax and other assets worth 170 million baht. Any remaining amount will be recognized as goodwill from future cash flows.
Bangchak's establishment of a subsidiary to manage the business is a standard legal and business procedure to separate specific assets. BCPG's expansion into energy infrastructure, with the Phetchaburi project generating over 900 million baht in annual revenue, is conducted in accordance with established guidelines for listed companies. Mr. Chaiwat emphasized that any past observations may be due to incomplete information and misunderstanding of the transaction's structure and accounting principles. He reiterated Bangchak's commitment to transparency, good governance, and cooperation with relevant agencies.