Chevron and PTTEP win new acreage offshore Thailand

Thailands national upstream company PTTEP and US supermajor Chevron have boosted their upstream portfolios with the award of new acreage offshore Thailand offered in the countrys 24th licensing round.

PTTEP has won blocks G1/65 and G3/65, while Chevron was awarded a licence for Block G2/65, confirmed the Department of Mineral Fuels.

Thailands Cabinet on Tuesday approved the awards, which met the criteria set by the department under the nations current production sharing contract terms.

Thailand expects investments of at least 1.5 billion baht ($42.5 million) in the initial six-year exploration terms while other bonuses for the three blocks amount to some 640 million baht.

Blocks G1/65 and G3/65 cover 8487 square kilometres and 11,646 square kilometres respectively, while Chevrons new block G2/65 spans 15,030 square kilometres.

There has been historic exploration on all three tracts and the DMF hopes that renewed work will quickly translate into fresh hydrocarbon production from the mature Gulf of Thailand.

We hope the new blocks will be eventually added to our petroleum reserve portfolio after waiting for 15 years, Sarawut Kaewtathip, DMF director general, was quoted by the Bangkok Post.

The 24th Round was launched last year after a 15-year hiatus in licensing rounds in Thailand.

Technically proven play types

All three of the just awarded blocks contain prospects and play types that have been technically proven by previous exploration activities on nearby acreage, the DMF earlier said.

Blocks G1/65 and G2/65 are located along the western part of the Pattani basin, which is one of the largest Cenozoic sedimentary basins in the Gulf of Thailand, and has the highest total production rate of gas, condensate and oil in the Gulf.

Block G1/65 comprises areas A and B, with Area A containing the relinquished Jamjuree South production area. Block G3/65 also has areas A and B. Area A is home to the relinquished Bussabong and Chang Dang production area, while Area B contains relinquished Pikul production area.

PTTEPs minimum work commitment for Block G1/65 is the acquisition of more than 250 square kilometres of 3D seismic or 2D seismic equivalent plus one exploration well apiece on Area A and Area B, with a total spend of at least $7.5 million.

For Block G3/65, which lies just 35 kilometres offshore Narathiwat province, the companys minimum seismic obligation is the same but is a requirement to drill three exploration wells two of which must be in areas determined by the DMF.

PTTEP said that winning these blocks aligns with the companys investment strategy, which aims to promote growth in strategic focus areas.

The proximity of these blocks to the companys current operations will enhance the potential for swift commercial development and cost optimisation, confirmed PTTEPs acting chief executive, Suksant Ongvises.

Moreover, the production contribution from these two blocks would help alleviate the concern over Thailands energy security.

PTTEP will operates blocks G1/65 and G3/65 with 100% operated equity.

Meanwhile, Chevron must undertake the same minimum seismic commitment plus drill two wildcats one in the northern part of Block G2/65 (dubbed Area A) and one in Area B, to the south of this tract.

Ronnarong Chanlekha, director of Chevron Offshore (Thailand), said: Chevron Offshore is pleased to be entrusted by the government to be the contractor of the G2/65 field. This right reflects our commitment to continuing our mission of delivering cleaner, safer and reliable energy to support national energy security and build the country's long-term economic and social growth.

By combining knowledge and expertise in the geology of the Gulf of Thailand with modern technology Chevron is confident that it can efficiently develop petroleum offshore exploration block G2/65 to continuously strengthen the energy security for the country.

The awarded PSCs have a six-year exploration term which, on application and approval, can be extended once for up to three years, to be followed by a 20-year production period.

The signing dates for these PSCs will be determined later.

Upstream has approached Chevron for further details regarding its newly awarded assets.

The so-called 24th Round was the first since the 20th Round back in 2007 when a total of 65 exploration blocks nine in the Gulf of Thailand and 56 onshore were offered.

Subsequently 28 of these have been awarded 21 onshore and seven in the Gulf of Thailand but of these, only blocks G7/50 and 68/50 are currently in production, the DMF said.