PTT Exploration and Production (PTTEP) will propose its shareholders approve a debenture issue of Bt50 billion next month, to refinance and spend a Bt284.71-billion investment budget within five years.

The company needs to pay US$190 million (Bt6.8 billion) in refinancing in September, said president Maroot Mrigadat.

Meanwhile, expenditures for 2007-11 will total Bt284.71 billion, of which 76 per cent will be invested in Thailand and the remaining 24 per cent on projects abroad.

For this year, it has set total expenditure at Bt74.51 billion. Of that, Bt48.41 billion will be spent on local investment and Bt26.1 billion abroad.

It has already invested in 10 countries in Southeast Asia, North Africa and the Middle East.

Moreover, its proven reserves are expected to reach nearly one billion barrels of oil equivalent (BOE) at the end of the year, thanks to upside potential from local and international projects.

The company's proven reserves were 923 million BOE as of the end of last year.

It expects to include reserves from exploration projects in Thailand, Burma, Vietnam and Oman once these projects receive production certificates, said Maroot.

To increase its reserves further, he said PTTEP had been focusing on exploration projects in Africa, the Middle East and nearby countries like Malaysia, Indonesia and Cambodia.

He said it was working with state-owned Bangladesh Oil, Gas and Mineral (Petrobangla) to study the possibility of developing Bangladesh's offshore fields for natural-gas production.

"We've signed a memorandum of understanding with Petrobangla for academic cooperation to study offshore field development," said Maroot.

The joint study will take about six months to complete. PTTEP will examine the resulting information to determine whether the area is viable for commercial development, he said.

The cooperation is part of the company's attempts to expand its petroleum resources to meet Thailand's growing demand for natural gas. The Kingdom's natural-gas demand is expected to rise 8 per cent this year from about 3.5 billion standard cubic feet a day at present.

Maroot said the company was maintaining an average sales target this year of 187,713 BOE a day, up 9 per cent year on year.

The higher output is mainly from oil and natural-gas production from its project in Oman, the Phu Horm natural-gas project in the Northeast and crude-oil production from the offshore Nang Nuan project, he said.

The growth of PTTEP's sales volume from 2007-11 is targeted at 9.37 per cent a year, with sales

targeted at 269,541 BOE a day in 2011.

He said the Arthit project was expected to start natural-gas production in next year's first quarter after a delay of six to nine months. Production is expected to be about 330 million standard cubic feet a day.

The Arthit North project, with estimated production of 120 million standard cubic feet a day, is scheduled to begin operations in about next year's second or third quarter.

And Maroot said the Vietnam 9-2 project, with crude-oil production of 20,000 barrels a day, would start operations in the second half of 2008.

Chalida Ekvitthayavechnukul

The Nation