Chevron wants next govt to outline plans for expired petroleum concessions

Corporate May 28, 2014 00:00

By Watcharapong Thongrung
The Na

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Chevron Thailand Exploration and Production wants the next government to provide guidelines on how it intends to manage to-be-expired petroleum concessions. Chevron Thailand is ready to continue its investments to maintain its petroleum reserves in the Gu

Pairoj Kaweeyanun, president of Chevron Thailand Exploration and Production, which holds the concessions on more than half of the natural-gas production in the Gulf of Thailand, said it wanted to know how the next government would manage the to-be-expired concessions so the company could plan its future exploration and production operations.
Department of Mineral Fuels data show that Chevron’s concession blocks (10, 11, 12, 13, B12/27) which cover production areas such as Erawan, Satul, Funan, Banpot, Jagrawal, Bang, and Platong will expire in 2022. They account for 60 per cent of the current gas production in the Gulf of Thailand, equivalent to about 1,200 million cubic feet per day out of a total of 1,800 mmcfd. 
Chevron will continue to invest in exploration and production in the existing concession blocks. It wants the government to provide specific management guidelines five years before the concession blocks expire in 2022, Pairoj said. 
For 52 years – since 1962 – Chevron has played a major role in petroleum exploration and production in the Gulf of Thailand. The company has invested more than Bt998 billion, creating about Bt200 billion a year in additional money circulation in Thailand. 
Last week, Chevron took journalists on a tour to view the petroleum-production process at the Platong concession block, which produces crude oil, natural gas and condensate. The Platong block is the largest block in the Gulf of Thailand, with the addition of Platong Gas II project. Chevron plans to invest US$3.1 billion (Bt90 billion) over the life of the project. The block has 62 production wells, which supply (on contract) 330 mmcfd of natural gas to PTT per day. The block’s concession is due to expire in 2022. 
Earlier, Songpope Polachan, director-general of the Department of Mineral Fuels, said the government could permit existing concession holders to continue to operate petroleum fields after their concessions expire, whereby the government converts the assets in those fields into shares for joint investment with the concession holders, such as Chevron. 
This would require amendment of the Thai Petroleum Act, or the introduction of new draft laws pertaining to the management of the concessions due to expire. Initial estimates by the department show that about 5 trillion cubic feet of gas reserves will remain after the concessions of Chevron and PTT Exploration and Production expire.
Current department data show that Thailand has proven (more than 90 per cent) natural-gas reserves (P1) of about 9.04 trillion cubic feet and probable (more than 50 per cent) gas reserves (P2) of about 9.57 trillion cubic feet. Such reserves would last for about another seven years if no new reserves are discovered.
According to the Thai Petroleum Act of 1971, expired petroleum-field concessions cannot be renewed, and all investments in the assets, equipment related to production and exploration of the concessionaire, as well as the petroleum/gas fields will belong to the state.