PTTEP Wins Operatorship of Two Thai Blocks
PTT Exploration and Production (PTTEP) December 13 said it has won the right to operate the Bongkot and Erawan gas fields starting from 2022.
"PTT Exploration and Production Public Company Ltd. confirms its readiness to continue the operatorship in the Bongkot gas field and to become the operator in the Erawan field starting from 2022. The company will move forward with the field development plans to ensure continuity in natural gas supply for the country's energy security," it said. The Erawan field was previously operated by Chevron.
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.
"Our proposed development and investment plans will enable us to produce natural gas at the required production levels of at least 700mn ft3/d and 800mn ft3/d from the Bongkot and Erawan fields respectively during the production sharing contract regime," PTTEP's CEO, Phongsthorn Thavisin, said.
For the Bongkot field, of which it is the existing operator, PTTEP will be able to invest immediately to deliver the production level it has committed to, Thavisin said. Meanwhile, PTTEP will develop a workplan and investment plan for the Erawan field during the operatorship transfer. "We expect good support from the existing operator, the Department of Mineral Fuels and government agencies so that we can start the required activities immediately to ensure the continuity of natural gas supply," said Thavisin.
Wood Mackenzie’s research analyst, Jean-Baptiste Berchoteau, said: "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."
This development, according to WoodMac, confirms the trend of a retreat of majors from the southeast Asia region.
"This is the second major loss for Chevron in South East Asia after losing its Rokan asset to Pertamina in Indonesia earlier this year. Chevron's reserves and production in the region is now expected to fall drastically post-2022 and South East Asia could become a non-core region for the major," it said.
"This also confirms a trend that Wood Mackenzie identified last year where we anticipated a progressive retreat of the majors from South East Asia, opening a gap we expected to be filled by regional NOCs," Berchoteau concluded.