PTT Exploration and Production Plc (PTTEP) has been awarded exploration and production licences at two of three new petroleum blocks in the Gulf of Thailand, which should pave the way for more domestic oil and gas supply to strengthen the country’s energy security.
The company was awarded the rights for blocks G1/65 and G3/65, while US-based Chevron Offshore (Thailand) was awarded a licence for block G2/65, according to the Department of Mineral Fuels.
The cabinet on Tuesday approved the agrements, which met the criteria set by the department under production-sharing contracts (PSCs).
“We hope the new blocks will be eventually added to our petroleum reserve portfolio after waiting for 15 years,” said Sarawut Kaewtathip, director-general of the department.
The long delay in holding the new auction resulted from a mix of economic and political incidents, including the 2007-09 global financial crisis, domestic political tensions in 2009-10, and calls for the government from 2014-16 to change a petroleum law by adopting a PSC model when granting concessions to oil and gas operators. The pandemic was also a factor as it caused a global oil price collapse.
Blocks G1/65 and G3/65, to be explored by PTTEP, cover 8,487 square kilometres and 11,646 sq km respectively, while block G2/65 spans 15,030 sq km.
PTTEP, which currently operates the Erawan and Bongkot gas blocks in the Gulf of Thailand, plans to increase its domestic gas supply to help relieve the nation’s financial burden as it imports more liquefied natural gas (LNG) following a drop in gas supply. LNG prices in the spot market were previously very high, causing a spike in power bills.
The three offshore blocks were partially explored decades ago, but have yet to be developed into petroleum production sites. The department estimated capital spending for the exploration of the three blocks at 1.5 billion baht and, if things go smoothly, the first oil or gas production should happen within five years.