Energy Ministry re-enters talks with Chevron over gas-field dispute

By The Nation

 

 

The Energy Ministry said its decision to restart talks with Chevron over who should remove offshore gas platforms in the Gulf of Thailand will not affect the country’s energy security.

 

Chevron Thailand Exploration and Production Ltd decided to re-enter the arbitration process a year after breaking off talks to resolve a dispute over decommissioning of its assets in the Erawan gas field.

 

The company said it was seeking more transparency on the responsibility for removing platforms in the field before it is handed back to the government.

 

Last year, Thailand asked Chevron to pay decommissioning costs of around $1.5 billion before the field is handed back to PTT Group when Chevron’s concession comes to an end in April 2022.

 

PTT is planning to build a liquefied natural gas (LNG) receiving terminal in the field to handle 19 million tonnes of LNG per year.

 

Auttapol Rerkpiboon, CEO of PTT, said Thailand’s efficient energy management would ensure there were no shortages as the government, Chevron and PTT sought the best solution to the dispute.

 

Chevron lost out in the bidding for the new Erawan field concession to PTT Exploration and Production (PTTEP), won is planning to operate eight processing platforms by the middle of 2021.

 

The platforms will produce 800 million cubic metres of gas per day under a contract capped at a total Bt1.2 billion cu/m. The dispute concerns the decommissioning of 142 platforms.

 

The Energy Ministry has reduced its initial Bt1.5 billion estimate for decommissioning since some of the platforms will be useful to PTTEP’s operations.

 

Source: https://www.nationthailand.com/news/30395666

 

-- © Copyright The Nation Thailand 2020-10-06

 

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4 hours ago, webfact said:

Chevron lost out in the bidding for the new Erawan field concession to PTT Exploration and Production (PTTEP), won is planning to operate eight processing platforms by the middle of 2021.

Highly likely that Chevron lost to PTT due to backhanded dealings of the Thais with the government. Now after cheating the Farang company, the Thais want Chevron to pay to decommission. 

 

I hope Chevron leaves the Thais with the mess. 

57 minutes ago, Fex Bluse said:

Highly likely that Chevron lost to PTT due to backhanded dealings of the Thais with the government. Now after cheating the Farang company, the Thais want Chevron to pay to decommission. 

 

I hope Chevron leaves the Thais with the mess. 

Chevron have been planning a pull out from South East Asia for a long time, nothing to do with backhanded dealings. 

52 minutes ago, Fex Bluse said:

Highly likely that Chevron lost to PTT due to backhanded dealings of the Thais with the government. Now after cheating the Farang company, the Thais want Chevron to pay to decommission. 

 

I hope Chevron leaves the Thais with the mess. 

Recall that PTT is a state-owned enterprise. Its policies and actions therefore can be expected to reflect the position of the government.

As such there is no true "lost to PTT" but rather being directly driven out by the government. This is very akin to nationalization of foreign assets similar to the Venezuela takeover of foreign oil & gas production facilities.

 

It is encouraging that the government has decided to comply with arbitration agreement to re-engage dialog with Chevron. But I expect arbitration will ultimately rule for Chevron. So perhaps government re-entering talks with Chevron is a stall tactic while bringing to bear "hidden political pressures" that cannot be disclosed publically.

foreign company put time & money in finding gas field, get a consession for xx years, thailand takes over for free

10 hours ago, webfact said:

Chevron to pay decommissioning costs of around $1.5 billion

 

10 hours ago, webfact said:

The Energy Ministry has reduced its initial Bt1.5 billion

 

Just deduct the full $1.5 billion as per the original contract.

I would assume that whoever won the bidding to operate this field took it over 'as is'.   They should have made allowances for decomissioning before maki g their bid. Should not come back now and ask Chevron to pay.

 

13 hours ago, Srikcir said:

This is very akin to nationalization of foreign assets similar to the Venezuela takeover of foreign oil & gas production facilities.

That worked out well for Venezuela (insert sarcasm).......Thailand needs to be careful.

On 10/6/2020 at 11:34 PM, ross163103 said:

That worked out well for Venezuela (insert sarcasm).......Thailand needs to be careful.

The Thais try to do everything their cousins in China do. What they don't understand is that Thailand has almost no leverage as the country is critical to nobody. Rice can get elsewhere. Can also train any population to assemble goods. Can even get decent HJs in other countries.