New Mineral Fuels head outlines fields plan

New Mineral Fuels head outlines fields plan

Premrutai Vinaiphat vows a smooth transition in the Gulf of Thailand. By Yuthana Praiwan

Mrs Premrutai says the department will work with relevant state agencies to clarify E&P rights.
Mrs Premrutai says the department will work with relevant state agencies to clarify E&P rights.

Premrutai Vinaiphat, 56, is the newly appointed director-general of the Mineral Fuels Department, in charge of the upstream petroleum regulator in Thailand.

She was promoted in early October 2018 from inspector in the Energy Ministry.

Mrs Premrutai assumed the position during the last screening period for the Erawan and Bongkot gas fields, the country's main gas resources in the Gulf of Thailand.

The fields are expected to be retired in 2022 and 2023, respectively.

The auction saw PTT Exploration and Production Plc (PTTEP) winning both bids. PTTEP currently operates the Bongkot field while Chevron runs Erawan.

PTTEP has been ordered to synchronise gas production with the existing operator to ensure no interruptions over the next three years before the Erawan concession ends.

Mrs Premrutai has to oversee the synchronisation between the old concessionaire and the newcomer before her retirement in September 2022.

How will the department support the smooth transition of both concessions?

We are working on two tasks. The first one is to shift from the benefit sharing system under the current concessions to production-sharing contracts (PSCs).

Fortunately we have staff who have been working with the Malaysia-Thailand Joint Development Area, one of the overlapping offshore gas fields in the Gulf of Thailand, for more than two decades, using the benefit sharing system, so the PSC is not totally new to us.

The second task is letting the newcomer work alongside the existing concessionaire while maintaining the gas production volume.

We have already set up the PSC unit with several experts to prepare the new system that will be implemented after 2022 and 2023 at each site.

The preparation from both state and business counterparts aims to avoid interruption in gas supply that will harm the country's economy and power generation. The new production rig will take roughly 30 months to develop, so the schedule should be very precise for the development time.

What about Round 21 of the country's petroleum exploration and production (E&P), which has been delayed since October 2014?

The next round of E&P activities is expected to be announced to interested investors in the second half in 2019. Round 21 was opened four years ago, and the department stated that there are 29 petroleum blocks nationwide. Of those, 23 blocks are onshore and six are offshore fields in the Gulf of Thailand.

But the onshore petroleum blocks were a source of conflict between the state agencies for land development, city planning and forest conservation, as most locations are key sites for agricultural reform, forest conservation and historic conservation.

We will work with relevant state agencies that oversee land regulators to clarify E&P rights.

Since I was promoted to inspector several years ago, I learned that several sectors did not understand how E&P activities are very crucial for oil and gas to reach households.

We have a special working unit to ensure public understanding and educate locals. The oil and gas resources are underground, so communities have to understand how drilling and pumping works.

In addition, we have to prepare the benefit sharing system to be applied for Round 21, including the PSC, concession and service contracts to form a clear-cut policy for E&P investors.

The new round of licence granting has yet to be announced.

How much gas volume needs to be reserved underground?

The updated gas data for proven underground reserves (1P) and probable reserves (2P) stood at 6.4 trillion cubic feet (Tcf) and 4.6 Tcf, respectively, as of December 2017.

Only 1.3 Tcf can be produced per year, so we need to have new drilling activities because they have been postponed for four years.

Once oil and gas activities have been carried out in larger volumes than the actual volume of 1P and 2P, the country will gain greater benefits from the petroleum discovery.

What about revisions to the national gas plan in 2019?

We are waiting for the national power development plan (PDP) 2019 because it is the master plan, related to oil, gas, coal and electricity imports. As soon as the PDP is finished, the gas plan will follow.

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