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| Regional Spotlight |
Gulf of Thailand seeing renewed activity
by Alan Waldman, Los Angeles
(3/12/2007) Thailand, Malaysia, Cambodia, and Vietnam are all set to benefit from promising new offshore hydrocarbon discoveries in the Gulf of Thailand. Thailand will profit from recent activity in its huge Bongkot Field, in its Arthit Project (where various problems had delayed E&P but which is now moving forward), and in Block B 5/27, with its promising Jasmine Field - and it could also profit from the recent and upcoming licensing of 22 additional Gulf of Thailand blocks by the new Thai government.
All four countries are likely to profit from drilling and development successes in areas shared jointly by various pairs of them: the Thai-Cambodian joint areas in the northern Gulf of Thailand; the Malaysian-Thailand Joint Development Area (JDA) in the southern part of the Gulf;, and the Malay-Vietnam Commercial Arrangement Area (CAA) even farther south.
Because of meaningful discoveries in the past three years, Thailand has seen its proven natural gas resources increase by 11.3% - from 13.3 Tcf at the end of 2004 to 14.8 Tcf today. More than 47% of that gas (7 Tcf) lies beneath the JDA and another 27% (4 Tcf) is under Bongkot. Last year Thailand produced 7.87 bcf of gas.
Thailand contains 291 million bbl of proven oil reserves. In 2005, it produced 306,000 b/d of oil, an increase of about 54,000 b/d from the previous year. Of that production, only about 114,000 b/d was crude oil; most of the remainder was natural gas liquids and condensate.
Primary players in the Gulf of Thailand include Chevron, Shell, Thailand's national company PTTEP, Petronas Carigali, Aabar Petroleum's Pearl Energy, The Triton Energy subsidiary of Hess, Talisman Energy, BG, Total, and the national oil companies of India and China.
Bongkot
Bongkot, Thailand's largest gasfield, is located 644 km south of Bangkok in the Gulf of Thailand. Currently it produces 620 million cf/d of gas and about 18,000 b/d of condensate. PTTEP is the operator and 44.45% owner of Blocks 15 and 16 and the Bongkot concession, in partnership with Total (33.33%) and BG (22.22%).
PTTEP plans to spend US$575 million (8% of its 2007 budget) in Bongkot to install three more wellhead platforms and to drill 16 development wells. In late January, it reported successful new gas discoveries from exploration wells in Blocks 15 and 16 - Ton Chan-1X, Ton Chan-2X, and Ton Rang-2X - at thicknesses of 143 meters, 44 meters, and 72 meters respectively. Development plans for these three discoveries are currently under study with the prospect of production startup in 2009. Ton Chan-1X is the first exploration well drilled at Bongkot in eight years.
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Bongkot Phase II development. |
Last July, PTTEP declared its plans to carry out thorough exploration of the Greater Bongkot South Field, about 227 km offshore Nakhon Si Thammarat Province. The field should be in full production by 2010.
Arthit
The Arthit Field in Block 15a, plagued with development problems ranging from technical difficulties to shortages of equipment, was initially due to go on production in 2006, but that was pushed back to this year and now back to the first quarter 2008. It is expected to have an output of some 330 million cf/d. PTTEP is the operator of Block 15a and the Arthit Field with 80% interest, in partnership with Chevron Thailand Exploration & Production (16%) and Moeco (a subsidiary of Mitsui Oil, with the remaining 4%).
PTTEP recently reported its intention to spend $1.58 billion in Arthit Blocks B14a, B15a, and B16a, building and installing the production platform and four wellhead platforms, as well as drilling 37 development wells before the end of the third quarter. Plans call for a floating production, storage, and offloading vessel (FPSO) to be located at Arthit North to produce gas and condensate at the rate of 120 million cf/d starting in 2008.
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Arthit wellhead platform installation. |
Phase 1 construction work is progressing well, with six wellhead platforms, five gas pipelines and one condensate pipeline now in place. The central processing platform itself is 69% complete, and, at 16,800 tons, it is the biggest and heaviest platform ever built in Southeast Asia.
PTTEP has drilled 53 Arthit production wells and found high quality natural gas as expected. Over the next five years, it is committed to spending $6.12 on further development of the Arthit and Bongkot Fields.
Block B 5/27
Very recently, Pearl Energy achieved a significant milestone with production at its Jasmine Field in the Gulf of Thailand's Block B 5/27 exceeding 20,000 b/d. The field produces oil at two platforms. The increase in production follows the commissioning of Platform B of the field on 22 January.
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Jasmine FPSO. |
From an initial rate of 2,300 b/d, production has now climbed to about 12,000 b/d from six development wells on the platform. Platform A, which came on stream in June 2005, currently averages 8,200 b/d and had produced 5.3 million bbl by the end of 2006. Pearl's oil output will get a further boost in a few months when Platform C will be ready for development drilling. Pearl is reviewing the commercial viability for two additional production platforms in and around the Jasmine Production Area, following a successful 14-well exploration program in the first half of 2006.
Thai-Cambodia
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| Chevron drilling discovery in Thai-Cambodia joint area. |
On 15 January, Te Duong Tara, director general of the Cambodian National Petroleum Authority, declared that his country's offshore province is likely to yield considerably more millions of bbl of oil than has been previously estimated.
Chevron had previously estimated that it contained 400 million bbl of oil and 3-5 Tcf of natural gas, but the latest oil estimate is 700 million bbl. Chevron is still drilling and should produce a revised estimate of reserves by June. Chevron is the largest investor in Cambodia's offshore play to date, having invested some $130 million in exploration so far. Oil production could commence as early as 2008. The NPA official said few concessions remain available in the Cambodian offshore area, although a Chinese company is negotiating for several blocks there.
Thailand and Cambodia have been in talks to settle a method of jointly exploiting the oil and gas resources in three blocks in their Overlapping Claims Areas in the Gulf of Thailand. The two countries have agreed that revenues derived from the largest of the three blocks will be equally shared.
A final treaty is expected to delimit Area I and elaborate on development of oil and gas resources in Areas II, III, and IV of the Overlapping Claims Areas, which are believed to harbor approximately 11 Tcf in gas reserves and a yet-to-be-determined volume of oil and condensate.
Malaysia-Vietnam
Talisman is currently active in Block PM-3 of the Malay-Vietnam CAA, which covers an area of 348,000 acres and contains six oil and gas fields. The PM-3 CAA project is currently producing 60,000 b/d of oil and 270 million cf/d of gas. Talisman, through its two subsidiaries, Talisman Malaysia and Talisman Malaysia (PM3), is the operator of Block PM-3 CAA, with a 41.44% interest. Petronas Carigali holds a 46.06% interest, and Petrovietnam Investment & Development Company holds a 12.5% interest.
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