Gas field auction details finalised
Details for Bongkot and Erawan out today
The auction plans for the Bongkot and Erawan gas blocks in the Gulf of Thailand have finally been determined after almost a dozen postponements in the last two years.
The winning bidders for the Erawan and Bongkot gas blocks in the Gulf of Thailand are expected to sign productionsharing contracts with the government by February 2019, said Energy Minister Siri Jirapongphan.
Mr Siri said yesterday after a National Energy Policy Council meeting chaired by Prime Minister Prayut Chan-o-cha that the committee acknowledged the terms of reference for the auction of the two blocks.
Details are to be announced officially today.
The concessions of the Erawan and Bongkot gas blocks are due to expire in 2022 and 2023, respectively.
Erawan and Bongkot combined produce an average of 2,110 million standard cubic feet per day, contributing up to 75% of gas production from the Gulf of Thailand.
Mr Siri said applications are scheduled to be filed with the Mineral Fuels Department from April 24, while preliminary qualifiers will be shortlisted and announced by May.
The department will allow participating bidders four months to pass preliminary qualifications by making information about the gas blocks available before auction proposals are due to be filed in late September.
The department will take about 2½ months to consider the proposals and will announce the winners by late December this year. The contract is expected to be signed by February 2019.
Mr Siri said the government also wants PTT Exploration and Production Plc (PTTEP), the SET-listed oil and gas drilling company, to participate in the auction.
The ministry expects at least three companies will tender bids, with United Arab Emirates’ Mubadala Investment Company expected to join the race.
Somporn Vongvuthipornchai, PTTEP’s president and chief executive, said the company is maintaining its commitment to joining the Erawan and Bongkot auction.
“As a state enterprise, PTTEP has exploration and production experience, and has operated the Bongkot gas field for more than 20 years. We understand the gas field’s geology very well,” he said.
“Moreover, PTTEP has increased its production efficiency and reduced its operating cost. We are confident we are a competitive company.”
Mr Somporn said if PTTEP is selected to operate the gas fields, the company will be able to produce natural gas without interruptions, and “deliver many benefits to the Thai government”.
PTTEP plans to bid in the auction along with Total E&P Thailand, its French partner. The companies will share the know-how and technology PTTEP derived from its lengthy occupation of the Bongkot gas field.
PTTEP also expects to increase its investment in Erawan, but is still in talks with Chevron, one of its current operators.
“If the two companies cannot reach an agreement, PTTEP will bid for Erawan by itself,” said Mr Somporn.
Musabbeh al-Kaabi, Mubadala’s chief executive for petroleum and petrochemicals division, said the company is interested in the auction for the two gas fields. Mubadala is actively seeking to build up its existing business in Thailand, he said.
“We are equipped to play a strong role for these strategic gas assets,” said Mr Kaabi.
Mubadala also operates the Nong Yao and Manora petroleum fields in Thailand.