PTTEP Pledges $30bn Investment as it Takes Two Thai Blocks
PTT Exploration and Production Public Company (PTTEP) signed off on production sharing contracts for the Erawan and the Bongkot fields in the Gulf of Thailand and pledged to invest over $30bn February 25.
The national oil company beat US major Chevron to win the right to the twin offshore blocks in December. Until now, PTTEP has operated Bongkot. The Thai company will take over from Chevron as operator of Erawan in 2022.
“From now, PTTEP ED will closely collaborate with the Department of Mineral Fuels and the existing operator to confirm the smooth operatorship transfer in 2022,” PTTEP CEO Phongsthorn Thavisin said.
He also insisted his company will “ensure no interruption in natural gas supply from both offshore fields”. PTTEP plans to invest THB 1 trillion ($31.96bn) to safeguard production volumes of least 700mn ft3/d and 800mn ft3/d from the Bongkot and Erawan fields, respectively. The investment will drive a drilling campaign and construction of additional wellhead platforms.
PTTEP submitted its bid alone for the Bongkot field, but partnered with Mubadala Petroleum on winning the right to operate the Erawan gas block, with an investment proportion between the two companies of 60% and 40%, respectively. The Bongkot and Erawan gas fields account for 60% of total domestic outputs.
Wood Mackenzie research analyst Jean-Baptiste Berchoteau said in December of the deal: "This confirms PTTEP's strategy to secure domestic gas supply and increase its reserves in the country. The low gas price constant value offered by PTTEP ($3.55/mn btu) truly reflects the national oil company's ambition to beat the competition and satisfy DMF's [Department of Mineral Fuels] intention to offer more affordable gas."