PTTEP plans for output to meet demand
Foreign Affairs to address Indonesia suit
PTT Exploration and Production (PTTEP), the only SET-listed upstream petroleum company, aims to produce at least 300,000 barrels of oil equivalent per day (boed) of petroleum to maintain its earnings and meet strong demand, says president and chief executive Somporn Vongvuthipornchai.
This level is around 6% below the output of 320,000 boed in 2016 as the company plans to rev up production at certain petroleum resources to offset declining output at ageing resources that require upgrades.
Mr Somporn said the company’s plan to raise production will be applied to all projects both domestic and overseas to secure petroleum supply to meet rising demand.
In Myanmar, PTTEP plans to increase production from offshore gas blocks at Zawtika and Yetakun. However, the exact rise in volume has not been decided.
“The plan to raise gas production at our blocks in Myanmar is in line with rising demand in the country, where the economy is growing quite fast,” he said. Petroleum sales in Myanmar and Thailand account for around 90% of the company’s total sales each year.
For Thailand, PTTEP will continue to beef up petroleum production at its Bongkot gas block in the Gulf of Thailand, although it is nearing the end of its concession. Exploration firms typically wind down production before concession expiry as it is uncertain whether the concession will be renewed.
Average output at Bongkot is 900 million standard cubic feet per day (MMSCFD), which the company aims to maintain this year and next. However, it wants to increase the proportion of gas production to capitalise on rising gas prices and strong demand. The gas will be sold to the country’s sole natural gas vendor, PTT Plc.
The Mineral Fuels Department is in talks with Chevron about gas production from the Erawan block, which is operated by Chevron, as the agency wants it to maintain its output at 1,100 MMSCFD. Veerasak Pungrasami, director-general of the department, said the negotiations are ongoing.
Mr Somporn said PTTEP plans to negotiate with related state agencies that own the land used for PTTEP’s Sirikit oilfield, also known as S1, about expanding production activity at the blocks, which currently produce 27,000 barrels of oil per day.
He said there is some Sor Por Kor agricultural land near S1 that has strong potential to have oil and gas deposits that could be dug up in the future.
Production from S1 has been increasing gradually since PTTEP acquired the production and exploration assets from Thai Shell Exploration and Production in 2004. Output stood at only 17,600 barrels per day 13 years ago.
Mr Veerasak said higher global gas prices could mean the price it sells to its parent PTT would rise by US$1-2 per million British thermal units.
The concessions for the Bongkot and Erawan gas blocks are due to expire soon, and the terms of reference for the new bidding round for the two gas blocks are due between next month and early next year, he said.
Dozens of exploration and production firms have expressed interest in joining the bidding, said Mr Veerasak.
Energy Minister Anantaporn Kanjanarat said the Foreign Affairs Ministry is expected to step in to help deal with the lawsuit against PTTEP by the Indonesian government based on its oil spill in 2009.
Gen Anantaporn said the ministry and the Thai government are concerned the case could affect the confidence of foreign investors considering Indonesia.
“We are working with the Foreign Affairs Ministry to set up talks with the Indonesian government because we are concerned
the issue could adversely affect the operations of PTTEP AA. We are afraid it would hurt foreign investors’ confidence if the Indonesians seize foreign assets without a court order,” he said.
The Indonesian government is suing PTT, its petroleum explorer PTTEP and PTTEP Australasia (PTTEP AA) for environmental damage in the Timor Sea from the leakage of hundreds of thousands of litres of oil off the northern coast of Western Australia in 2009 from the Montara wellhead operated by PTTEP AA.
Indonesia’s lawsuit was filed earlier this month at the Central Jakarta District Court. None of PTTEP AA’s assets have been seized, as the Indonesian government announced it planned to do.
PTTEP shares closed yesterday on the SET at 94.25 baht, down 1.25 baht, in trade worth 553 million baht.