PTTEP hopes to access Erawan next month

PTTEP hopes to access Erawan next month

Reliant on success of months-long talks

PTTEP is preparing to take gas rig structures to the Erawan gas field in the Gulf of Thailand.
PTTEP is preparing to take gas rig structures to the Erawan gas field in the Gulf of Thailand.

PTT Exploration and Production Plc (PTTEP) expects to be able to enter the disputed Erawan gas field in January next year, assuming months-long talks on site access can be concluded within December.

Known as G1/61, Erawan, located in the Gulf of Thailand, is a block currently operated by US-based Chevron Corp whose concession expires in April 2022.

PTTEP won an auction in 2018 to become Chevron's successor but is unable to enter the site because of an unsettled dispute between the US-based company and the Department of Mineral Fuels over who will pay for transferable asset decommissioning.

In August, PTTEP said it would sign a site access agreement by November, but the plan was rescheduled.

Permanent secretary for energy Kulit Sombatsiri said at that time that talks with Chevron to end the dispute should be concluded within this year.

Apart from the site access agreement, PTTEP expects to also sign an operations transfer agreement and an asset retirement access agreement in the next two weeks, said Montri Rawanchaikul, chief executive of PTTEP.

On entering the Erawan gas block, the company will need to take another 24 months to increase gas production to 800 million metric standard cubic feet per day (MMSCFD) under the production-sharing contract (PSC) made with the Department of Mineral Fuels.

During the gas production preparation, PTTEP will transport eight gas rigs for installation at the site where it will drill for gas in another 100 wells.

Due to a lack of new exploration, the gas supply may be lower than the PSC requirement.

The gas volume may decline to 500 MMSCFD from April next year from 1,000 MMSCFD at present, so PTTEP needs to increase gas production at other gas blocks by 300 MMSCFD to offset the decrease in supply.

The company expects to extract gas from the Arthit and Bongkot gas blocks in the Gulf of Thailand -- these blocks are currently producing 220 and 870 MMSCFD of gas, respectively.

"Over the past two years, we spent capital expenditures making rapid preparation for gas production at Bangkot and Erawan to ensure our gas supply will meet the requirement, said Mr Montri.

PTTEP's total petroleum sales volume as of June was 413 kilo barrels of oil equivalent per day (KBOED), a significant rise from 354 KBOED on average last year.

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