PTTEP shells out B23bn for Bongkot stake
Company's holding in field rises to 66.7%
PTT Exploration and Production Plc (PTTEP), the only SET-listed upstream oil and gas company, has completed the acquisition of a 22.22% stake in the Bongkot field from Shell for US$750 million (23.5 billion baht).
The share purchase agreement was processed in March.
The supplementary petroleum concession has already been signed by all parties, resulting in an increase of PTTEP's stake in the Bongkot field to 66.7%, the company said yesterday in a release.
The remaining stake is owned by Total, the French oil and gas giant.
Chief executive Somporn Vongvuthipornchai said the acquisition was approved by the cabinet in June after the agreement for the assignment and transfer was signed in January.
The acquisition follows the company's aggressive merger and acquisition strategy, through which it hopes to expand its petroleum reserves in the near and longer terms.
With this transaction, the company's sales volume will increase by about 35,000 barrels of oil equivalent per day (BOED).
This deal is also an important step for PTTEP to continue operating in the Bongkot field.
"Operating in the Bongkot field for 20 years has enhanced our expertise and experiences managing gas fields in the Gulf of Thailand at a competitive operating cost," Mr Somporn said.
The Bongkot project, consisting of blocks B15, B16, B17 and G12/48, is the natural gas field in the Gulf of Thailand with current sales of about 841 million cubic feet per day of natural gas and 27,000 barrels per day of condensate.
This gas field controls 30% of energy supply for electricity generation.
PTTEP reported that after finishing the deal, the company's average sales volume will be 302,000 BOED, slightly higher than last year's 299,000 BOED.
Bongkot and Erawan, another gas production field in the same area operated by Chevron, are in the process of being auctioned by the Mineral Fuels Department.
A final list of winners will be announced in December of this year.
PTTEP has attended the auction of two gas fields. Competitors in the auction included Chevron, Mubadala Petroleum and Total.
The two gas fields have a combined gas output of 2.2 billion standard cubic feet per day, or almost 50% of Thailand's gas demand.
PTTEP is also in talks to acquire stakes in oil and gas resources elsewhere in Asean and in the Middle East.
Mr Somporn said the company estimates the global oil price at $55-65 a barrel in 2018, above the $53.50 it averaged last year.
PTTEP shares closed Thursday on the Stock Exchange of Thailand at 126 baht, down three baht, in trade worth 2.3 billion baht.