PTTEP faces setback to Erawan deal

PTTEP faces setback to Erawan deal

Delay caused by Chevron dispute

PTT Exploration and Production Plc (PTTEP) expects it cannot access the Erawan gas field in the Gulf of Thailand to install production facilities this year as planned because of an unsettled dispute with US-based Chevron Corp.

Known as G1/61, Erawan gas field is operated by Chevron but its concession expires in two years and PTTEP, which won the auction for G1/61 concession in December 2018, will be a new operator from 2022.

Transferable assets need to be decommissioned, but it is in dispute over who will pay: Chevron or the Department of Mineral Fuels.

PTTEP, the oil drilling arm of national oil and gas conglomerate PTT, is ready for the assessment of facilities and infrastructure, but the talks with Chevron on the decommissioning issue and transferable assets have yet to be finalised.

The dispute is still in arbitration.

PTTEP senior vice-president Chanamas Sasnanand said yesterday she expects the delayed access to the site will not affect its gas production schedule in 2022. The Erawan gas field will change hands for production under PTTEP on time, she said.

PTTEP also won the bid for G2/62, or Bongkot gas field, in 2018. The two gas blocks are the largest in Thailand, making up almost half of gas supply in the country.

PTTEP yesterday also announced its new oil and gas production next year should increase sales volume by 13,000 barrels of oil equivalent per day (BOED).

Ms Chanamas said the additional natural gas will come from Malaysia's offshore Sabah H Project. Its shipment will be delayed to next year because of a technical sub-sea component-related problem.

Gas volume from Sabah H Project is expected at 7,000 BOED, she said.

For its new oil production, PTTEP expects to produce crude oil of 6,000 barrels per day from Algeria's Hassi Bir Rekaiz project in the middle of next year.

The amount is part of the first-phase capacity of 10,000-13,000 barrels per day in 2021. The second-phase capacity is set at 50,000-60,000 barrels per day in 2025.

PTTEP expects total sales volume will grow by 5% next year from 354,000 BOED it plans to sell this year.

The company estimates average oil prices in the global market will swing between US$40-42 per barrel during the rest of this year.

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