Thailand Inks Oil, Gas Production Pacts With Chevron, PTTEP

[Jai Dee]

Thailand Inks Oil, Gas Production Pacts With Chevron, PTTEP

Thailand's Energy Ministry Monday signed contracts with consortia led by a Thai unit of Chevron Corp. (CVX) and PTT Exploration & Production PCL (PTTEP.TH) to extend the production period of oil and gas blocks in the Gulf of Thailand by 10 years.

The extension will help secure natural gas supply for domestic use by another 15 years. Domestic natural gas consumption is expected to reach 3,300 million standard cubic feet a day in 2010 from 2,400 mmscf/d currently, the Energy Ministry said in a statement.

The contract signing followed Cabinet approval in mid-October, extending the production period for blocks 10-13 operated by Chevron Thailand Exploration & Production Ltd. and for blocks 15-17 operated by PTTEP by another 10 years from their current expiry dates in 2012-2013.

Oil and gas reserves in blocks 10-13 are estimated to be around 9.1 trillion cubic feet, while those of blocks 15-17 are around 3.9 trillion cubic feet, said Krairit Nilkuha, head of the Department of Mineral Fuels.

The consortium led by Chevron Thailand Exploration & Production will invest around $13 billion over the 10-year period and the PTTEP-led consortium around $3 billion, Krairit reiterated.

In addition, the consortium led by Chevron Thailand will pay a special benefit worth around $750 million to the Thai government over the 10-year period and the PTTEP-led consortium will contribute around $480 million, Krairit said.

The special benefit is in addition to royalty fees and a petroleum tax, he added.

The Chevron unit, Thailand's largest natural gas producer, will increase its production at the blocks by a total of 500 million standard cubic feet a day to 1,240 mmscf/d, said Tara Tiradnakorn, president of Chevron Thailand Exploration & Production.

The company expects to sign an additional natural gas supply contract for blocks 10-13 with Thailand's sole oil and gas buyer, PTT PCL (PTT.TH), Thailand's largest oil and gas conglomerate, by end-2007, Tara said.

Production from the Bongkot Field (blocks 15-17) will be increased by another 330-350 mmscf/d starting from 2011 from around 630-650 mmscf/d currently, said PTTEP President Maroot Mrigadat.

Bongkot, Thailand's largest natural gas production field, is 44.44% owned by PTTEP, 33.33% by Total E&P Thailand and 22.22% by BG Asia Pacific Pte.

Blocks 10-13 are majority owned by Chevron Thailand Exploration & Production. Its co-concessionaires include Japan's Mitsui Oil Exploration Co. and PTTEP.

Source: Dow Jones - 29 October 2007

[Mid]

more questions than answers here ,

a ) Oil ??

b ) increased electricity production from their own sources of raw energy as opposed to the current heavy reliance on Burmese gas ?

c ) Cheveron ?? , parent company currently under heavy fire in the US , see ( b )

[JimsKnight]

I think the article was being ambitious when it mention oil mid man.

They have some small gas fields but no PROVEN oil reserves (as yet).