SET-listed PTT Exploration and Production Plc (PTTEP), an oil and gas drilling firm, has acquired a 22.22% stake from Royal Dutch Shell's share of the Bongkot project.
The deal is worth $750 million (23.5 billion baht) before tax, and increases PTTEP's ownership in the Bongkot project from 44.44% to 66.66%.
The Bongkot area is one of Thailand's major gas resources, located in the Gulf of Thailand.
PTTEP acquired Shell's stake through its wholly-owned subsidiary, PTTEP International Co, which signed an agreement for the assignment and transfer of the 22.22% stake from Shell's subsidiary, Shell Integrated Gas Thailand Pte.
The capital for the deal will come from PTTEP's cash on hand, which is estimated at $4.5 billion.
The transaction is expected to be completed by the second quarter of 2018.
"The acquisition fits our growth strategy of adding producing assets or those in the final stage of development in Southeast Asia, where we have experience, and which immediately contributes sales volume, petroleum reserves and cash flow," said Somporn Vongvuthipornchai, PTTEP's chief executive.
The company's daily sales volume will increase by some 35,000 barrels of oil equivalent per day.
The Bongkot project, consisting of Blocks B15, B16, B17 and G12/48, is operated by PTTEP, with the remaining 33.33% stake owned by Total, a major French oil and gas company.
The sales volume is 860 million cubic feet per day of natural gas and 26,000 barrels per day of condensate.
This gas field is a vital source of energy supply for electricity, accounting for some 30% of domestic natural gas output.
PTTEP's operational capability in the Bongkot project, the first offshore gas field operated by a Thai oil and gas company, clearly demonstrates the competency of Thais in operating exploration and production assets at an international standard, Mr Somporn said.
"With regard to the Bongkot concession expiry in 2022-2023, we are ready to participate in bidding to continue as the operator to maintain energy security for the country," he said.
Early last year, Shell decided to sell its 22.22% stake in the Bongkot project to KUFPEC Thailand Holdings Pte, a subsidiary of Kuwait Foreign Petroleum Exploration Company.
Last October, Shell announced that the deal was cancelled.
Shell Group's divestment programme continues to make good progress at both raising cash and reshaping the company.
PTTEP is planning on resuming investment in oil and gas resources in the Middle East after it cancelled a drilling operation several years ago.
The new plan in the Middle East market may be a form of a merger and acquisition instead of new investment.
Bongkot and Erawan, another gas production field in the Gulf of Thailand operated by Chevron, are expected to be auctioned by the first half in 2018.
PTTEP shares closed on Wednesday on Stock Exchange of Thailand at 119 baht, an increase of one baht, in trade worth 3.84 billion baht.