Erawan delay no concern for PTTEP
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Erawan delay no concern for PTTEP

Contract for output shifted to 2024

A two-year delay for PTT Exploration and Production Plc (PTTEP) in entering the disputed Erawan gas block to prepare for new gas production will not have a negative impact on its business, says chief executive Montri Rawanchaikul.

The company plans to enter the gas field, located in the Gulf of Thailand, in January next year. PTTEP won an auction in 2018 to operate in the area. Known as G1/61, Erawan is operated by US-based Chevron Corp, whose concession expires in April 2022.

PTTEP has been unable to enter the site because of an unsettled dispute between Chevron and the Mineral Fuels Department over which party is responsible to pay for transferable asset decommissioning.

Talks with Chevron to end the dispute should be concluded within this year, according to permanent secretary for energy Kulit Sombatsiri.

Mr Montri said a delay in supplying gas under a production-sharing contract (PSC) with the department will not cause officials to file a lawsuit against the company.

"The first day of gas supply under the PSC will be pushed back to April 2024 rather than April 2022," he said.

The lack of new exploration at Erawan may cause gas supply to be lower than the PSC requirement of 800 million metric standard cubic feet per day (MMSCFD), said Mr Montri. Gas production at Erawan is 560 MMSCFD, a sharp drop from 1,200 MMSCFD in 2019.

PTTEP expects production from this gas block to keep declining to 200 MMSCFD between May and July next year. The company plans to offset the decrease by supplying gas from other fields, he said.

Mr Montri said gas supply from other sites in the Gulf of Thailand will be between 250 and 300 MMSCFD. These sites comprise the Arthit and Bongkot gas blocks as well as the Malaysia-Thailand Joint Development Area, which currently produce 220, 700 and 250 MMSCFD of gas, respectively.

PTTEP expects its petroleum sales to grow by 12% next year to 467 kilo barrels of oil equivalent per day (KBOED), up from 417 KBOED on average this year. New sales will come from Erawan, Oman's Block 61 gas field, and Block H off of Sabah, Malaysia, he said.

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