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PTTEP Signs PSCs for Erawan & Bongkot Fields Offshore Thailand

Source: www.gulfoilandgas.com 2/26/2019, Location: Asia

PTTEP Energy Development Company (PTTEP ED), a subsidiary of PTT Exploration and Production Public Company (PTTEP), confirms its readiness to play a vital role in carrying on the continuity of natural gas supply from the two major fields - Bongkot and Erawan. The company is confident that its proposals in the Production Sharing Contract (PSC) will deliver benefits to all parties and ensure energy security to the country.

The household and industrial sectors shall be satisfied with the better energy cost resulting from lower gas price, while the company can maintain the appropriate return on investment. PTTEP also anticipates good collaboration among all related agencies during the transition of operatorship in the Erawan field.

Phongsthorn Thavisin, PTTEP President and Chief Executive Officer, said after the signing ceremony of PSCs for the G1/61 field (the Erawan field) and the G2/61 field (the Bongkot field) on February 25, 2019 that PTTEP ED would move forward with the work plan with its top priority to ensure no interruption in natural gas supply from both offshore fields. For the Bongkot, in which PTTEP is the existing operator, the company will continuously put the investment in the project, while immediately executes the plan for transition of operations in the Erawan field. From now, PTTEP ED will closely collaborate with the Department of Mineral Fuels and the existing operator to confirm the smooth operatorship transfer in 2022.

'The continuity of natural gas supply is the top priority of the government and the operators, we believe, as the benefits will be brought directly to the country and Thai people. The state agencies are determined to smoothly proceed the transition of operations and we have already prepared for this process. We also expect to win support from the existing operator of the Erawan field in order to make sure that the natural gas production in the future will be supplied uninterruptedly as it has always been carried out,' said Phongsthorn.

Investment of THB 1 trillion to ensure production volumes from both fields

PTTEP ED plans to pour investment of approx. THB 1 trillion in the Bongkot and Erawan fields to safeguard the production volumes of at least 700 million cubic feet per day (MMSCFD) and 800 MMSCFD, respectively. The investment includes the drilling campagin of the exploration and production wells and the construction of additional wellhead platforms, for examples.

'As the Thai E&P company, we are committed to exploring for reliable energy sources for the state and Thai people. From 2022 onward, about 80% of the natural gas production in the Gulf of Thailand will be under our operations. This means PTTEP will become the largest producer of natural gas in the country, demonstrating our success in carrying out the mission to establish energy security to Thailand,' said Phongsthorn.

Regarding the manpower working for the Erawan field, PTTEP ED is pleased to work with all personnel who is ready to continue their duties and jointly create energy security. The plan of human resources in the field should be concluded within this year.

Commitment in the PSC will benefit the state, Thai people and the company’s business

Phongsthorn continued that the price constant of THB 116 per million British Thermal Unit (BTU) PTTEP ED proposed to the government is reasonable and will bring benefits to the state and Thai people. Meanwhile, acceptable return on investment for the company is also expected. PTTEP ED is able to offer such a lower price constant for gas sale as it sees the benefits and efficient operations from being the operator in both fields. Having the Erawan field in its portfolio will contribute higher gas production volumes as well as increased revenues.

Importantly, PTTEP expects to bring down the operational costs of approximately 20-25% by cost optimization from the operating synergy in both fields in general administration, drilling, wellhead platform construction and installation, logistics and procurement.

'Through the comprehensive analysis, we are confident that our proposals submitted in the bid will create mutual benefits to all relevant parties. For the sake of the country, we will be able to provide energy security. Thai people should be satisfied with the lower electricity price, which is the end result from decreased gas price. Meanwhile, PTTEP’s business remains profitable,' he said.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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