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PTTEP secures acquisition of Hess's subsidiaries in Thailand for $1 billion

PTT EXPLORATION and Produc-tion is acquiring Hess Corp's Thai subsidiaries in deals worth around US$1 billion (Bt32.3 billion), in a move that strengthens the company's domestic investment.

PTTEP's subsidiaries, PTTEP Offshore Investment and PTTEP International, have signed share purchase agreements on Tuesday to acquire 100-per-cent equity stakes of the Thai subsidiaries of the US-based company, namely Hess Thailand Holdings II (HTH) and Hess Exploration Thailand (HETCL).

HTH holds a 100-per-cent equity stake in Hess (Thailand), which owns a 15-per-cent interest in Block B12/27 of the Contract 4 Project - mainly covering petroleum fields including Pailin, Morakot and Ubon - and a 35-per-cent interest in Block EU-1 and Block E5 North of the Sin Phuhorm Project.

HETCL owns a 15-per-cent interest in Block G7/50 of the Contract 4 Project.

The total consideration of the transactions is about $1 billion, which will be funded by PTTEP's cash. The transaction involving HTH closed on Tuesday, while that of HETCL is expected to be closed by the end of May.

"The acquisition of Hess Corporation's interests in the Contract 4 and Sin Phuhorm projects is a strategic fit to PTTEP's growth strategy by adding producing assets, accretion of volume growth and reserves, and strengthening our investment in Thailand," Tevin Vongvanich, PTTEP president and CEO, said yesterday.

After the acquisition, PTTEP's production volume will be increased by about 17,000 barrels of oil equivalent (BOE) per day.

The Contract 4 Project is a natural-gas field located in the Gulf of Thailand, offshore of Songkhla province and covering an area of 3,118 square kilometres. The current production is about 387 million cubic feet per day of natural gas and 17,528 barrels per day of condensate, with total proved and probable reserves of 461 million BOE per day.

PTTEP is a partner of the project, in which it holds a 45-per-cent interest. After the current acquisition is accomplished, the company's stake will increase to 60 per cent, while Chevron Group will remain the operator of the project.

Located in Udon Thani and Khon Kaen provinces and covering an area of 231.6 square kilometres, the Sin Phuhorm Project is a natural-gas field with an output of 113 million cubic feet per day of gas and 496 barrels per day of condensate.

he total proved and probable reserves are around 45 million BOE per day.

PTTEP is currently a partner of the project with a 20-per-cent interest, which will rise to 55 per cent after the acquisition of Hess's assets is complete. It will then become the operator of the project.

PTTEP has invested in more than 40 petroleum exploration and production projects in Southeast Asia, the Middle East, Africa, Australia, North America and, now, also in South America.

The company's share price yesterday closed 2.21 per cent higher at on Tuesday Bt162.


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