In 2023, Bangchak Group made advances through its strategy to strengthen the business by acquiring common shares of Bangchak Sriracha Public Company Limited (formerly Esso (Thailand) Public Company Limited), with an investment value of approximately 26 billion baht. This acquisition provided the Group with strategic energy assets, including an oil refinery, oil terminal network, and service stations nationwide, valued at 55.5 billion baht. The transaction was completed on August 31, 2023, and a tender offer was extended for the remaining shares. Currently, the Group holds 76.34% of all issued and outstanding common shares.

The growth and expansion of the business in 2023 are also reflected in the record-high revenue from sales and services, amounting to 385.85 billion baht, an increase of 18% from 2022. The EBITDA reached a total of 41.68 billion baht, and the net profit attributable to the parent company was 13.23 billion baht, marking a 5% increase from 2022 and reaching the highest level since the Company’s inception. This equates to earnings per share of 9.27 baht. Every business group experienced significant development and success as follows:

The Refinery and Oil Trading Business Group,

which began as the smallest refinery in the country, has achieved a leading nameplate production capacity of 294,000 barrels per day. In 2023, the average crude run increased to 155,000 barrels per day following the combined operations with Bangchak Sriracha Refinery. Both Bangchak Phra Khanong and Bangchak Sriracha refineries plan to continue operating at full capacity.

The Company’s businesses comprehensively encompass the entire value chain, spanning from crude oil procurement to fuel transportation management via trucks, ships, pipelines, and logistics. The Company has also executed a construction contract for a Sustainable Aviation Fuel (SAF) production unit. Moreover, the Bangchak Phra Khanong Refinery is the only refinery in the world to have received the Global Performance Excellence Award (GPEA) for international quality management. Additionally, a platform has been created to manage the efficiency and maximize the benefits of two refineries by establishing the Refinery Optimization & Synergy Enterprise Company Limited (ROSE) in partnership with Bangchak Sriracha Public Company Limited (BSRC), which has become a subsidiary of Bangchak Group. The Group has smoothly managed operations Overview Corporate Governance Business Operations and Performance Financial Statements Attachment during the transition of shareholder structure changes and transformations in every dimension, resulting in strong operational performance and the ability to enhance the operational potential of the refinery business to accommodate the future production capacity increase of the Bangchak Sriracha Refinery.

The Marketing Business Group

has a network of 2,219 service stations nationwide at the end of 2023. This extensive network has significantly enhanced consumers’ accessibility to Bangchak fuels, resulting in total sales across all channels reaching a new record volume of 6,490 million liters – a growth of 9%. Service stations have transformed by changing the logo with the “New Leaf” symbol and changing the “Esso” logo to “Bangchak,” along with delivering products and experiences through the concept of “Your Greenovative Destination for Intergeneration.” Meanwhile, the Non-Oil Business continues to expand, with more than 1,000 Inthanin coffee shops and over 265 electric vehicle charging stations to meet the needs of all users.

The Clean Power Business Group,

represented by BCPG Public Company Limited, has expanded its investment in four natural gas power plant projects in the United States, solar power plants in the country, and the oil terminal business and oil jetty in Phetchaburi province.

The Bio-Based Products Business Group

represented by BBGI Public Company Limited, has transitioned from the biofuel business to the high-value bioproducts industry by establishing BBGI Fermbox Bio Co., Ltd. in partnership with Fermbox Bio Company Limited. This venture aims to provide services in the development and production of bioproducts using advanced biotechnology.

The Upstream Business, also known as the Natural Resources Business and New Business Group

saw OKEA ASA make significant investments in the Statfjord petroleum field (28%) in the Norwegian Sea, with the transfer of rights completed at the end of 2023. This resulted in OKEA ASA having a net petroleum production equivalent to 24,590 barrels of oil per day, an increase of more than 46.9%. In 2023, OKEA ASA played a significant role in driving the EBITDA of Bangchak Group, contributing up to 47.2% or approximately 19.67 billion baht. This contribution served to reinforce energy security during the transition towards clean energy.

Furthermore, the Company initiated new business venture initiatives by launching the country’s inaugural Liquefied Natural Gas (LNG) service station to promote the use of clean energy in the transport sector, the business of providing a platform service for swapping batteries for Winnonie electric motorcycles, to become as a leader in providing Battery as a Service (BaaS) for electric motorcycles. The network of battery-swapping stations has expanded to cover 120 locations. Additionally, Winnonie Co., Ltd., a subsidiary of Bangchak Group, has established the Smart EV Bike Co., Ltd. in partnership with the BTS Group Holdings Public Company Limited to operate a business of leasing electric motorcycles for professional riders in areas near BTS Skytrain stations.

On this path of growth, Bangchak Group was still able to maintain a strong financial position and financial discipline. Following the transaction of Bangchak Sriracha Public Company Limited, TRIS Rating Co., Ltd. has maintained the corporate credit rating of the company at an “A” level, reflecting a positive outlook on the strength of the financial position, as well as confidence in the business status among investors who have fully subscribed to Bangchak’s digital debentures worth 3 billion baht.

Bangchak Group places paramount importance on sustainable growth by maintaining a balanced approach in its business operations, demonstrating responsibility towards the environment and society, and consistently adhering to good corporate governance. In 2023, we were recognized for our excellence in sustainability, ranking in the top 2 in the world for sustainability within the Oil & Gas Refinery and Marketing industry group by the S&P Global Corporate Sustainability Assessment. Concurrently, the Group continues to advance our operations according to plans aimed at transitioning to a Low-Carbon society, with the goal of achieving Net Zero Greenhouse Gas Emissions by 2050.

I extend my heartfelt gratitude to our shareholders, business alliances, trading partners, relevant government agencies, society, and communities for their trust and continuous support of Bangchak Group’s operations. As we stride forward to our 40th year in 2024, we stand prepared to propel our business with the vision of “Crafting a Sustainable World with Evolving Greenovation.” Our commitment is to accelerate Bangchak Group’s sustainable growth, delivering benefits to our stakeholders and positioning ourselves to become a steadfast organization that thrives beyond 100 years, serving as a cornerstone of the energy sector for our country.

Bangchak Group is committed to sustainable growth that balances value and benefits for all stakeholders, encompassing ESG principles. We are committed to addressing climate change by driving the green economy towards a low-carbon society through our BCP316NET plan. This plan aims for the organization to achieve “Carbon Neutrality” by 2030 and “Net Zero” emissions by 2050.

The Company has developed a roadmap to achieve our goals by establishing a working group to develop guidelines for improving energy and resource efficiency, and to consider investment plans in low-carbon businesses and green innovations.

“Developing work processes, increasing productivity, improving efficiency and reducing costs, as well as developing human resources, innovative products, and prioritizing safety and sustainable business development while caring for the environment and society” is the driving force behind our success. In 2022, Bangchak Phra Khanong Refinery was the only organization in Thailand to receive the Thailand Quality Award (TQA). In 2023, it became the first and only refinery in the world to receive the Global Performance Excellence Award achieving the eminent World Class level from the Asia Pacific Quality Organization (APQO) for its international-level management practices.

In 2023, Bangchak Group is gearing the production of Sustainable Aviation Fuel (SAF) to meet the needs of airlines that prioritize reducing greenhouse gas emissions from air travel and transportation through the construction agreement of the sustainable aviation fuel production unit, the first of its kind in Thailand, with a production capacity of 1 million liters per day. This will help reduce greenhouse gas emissions by approximately 80,000 tons of carbon dioxide equivalent per year.

We have also developed a plan to procure raw materials by launching the “Fry to Fly” project to collect used cooking oil via Bangchak petrol stations and collaborate with major food business partners such as the “Five Star Chicken” and “S&P” brands to manage used cooking oil from kitchen operations for SAF production. This will help reduce carbon dioxide emissions and contribute to environmental protection and consumer health.

In addition, the Company has also expanded its framework for addressing climate change solutions through Oam Suk Social Enterprise Company Limited by supporting environmentally conscious farmers by purchasing “Low-Emission Rice” from the large-scale modern agricultural community enterprise in Doem Bang Sub-district, Doem Bang Nang Buat District, Suphan Buri Province. Farmers in this community have received knowledge transfer on rice cultivation methods that reduce flooding through the “wet-dry alternating rice cultivation” practice under the Thai Rice NAMA project. The rice is then used as premium gifts for customers at Bangchak service stations. The Company also further supports a network of community oil station businesses by installing rooftop solar systems for cost savings and encourage them to register carbon credits obtained from the solar installations in the T-VER program under the “Cooperative Network to Combat Global Warming” project.

As a leader in energy transition, the Company places importance on balancing business operations with a foundation based on equilibrium amongst the three challenges of the Energy Trilemma: Energy Security, Energy Affordability, and Environmental Sustainability. The Company’s acquisition of Esso (Thailand) Public Company Limited is a sound investment for the country as it will provide strategic energy assets. This enhances energy security for the nation, provides consumers with more affordable and accessible energy, and ultimately benefits the business. Our refining capacity will increase, and production efficiency will improve in an economically viable way. Additionally, we can extend our sustainability practices to our partners throughout the broader supply chain.

Furthermore, the Company remains committed to continuous development by participating in sustainability assessments with international agencies to ensure our sustainability initiatives comprehensively meet the expectations of all stakeholders.

On behalf of Bangchak Group, I would like to thank our shareholders and all stakeholders for the continuous trust, confidence, and support. As we enter our fifth decade, we remain steadfast in our pursuit of sustainable growth under our vision of “Crafting a Sustainable World with Evolving Greenovation.” We aim to benefit all stakeholders, to be a century-old organization serving as a pillar of energy for the country, and to create a balance between energy security, energy accessibility, and sustainability for Thai society. This will ensure a sustainable future for generations to come in line with our “Regenerative Happiness” goal of delivering boundless happiness.