UK-based Ophir Energy has taken a final investment decision (FID) on an expansion of the shallow-water Bualuang oilfield in the Gulf of Thailand that should convert 9.2 million barrels of oil resources into reserves.
The fourth-phase investment will comprise a bridge-linked wellhead platform with 12 slots, Ophir said on May 17, to be delivered through a capital budget of US$145 million between now and 2020.
It is scheduled for launch during the second half of 2018 and will include 14 development wells plus greater capacity for water disposal at the existing 16-slot Bravo platform.
Ophir picked up Bualuang in November 2014 after buying out former operator Salamander in an US$828 million all-shares deal.
Bualuang was then the site of an exploration programme between 2015 and 2016 that targeted 155 million boe of unrisked resources across six prospects in the South Western Sub-Basin.
Ophir argues that lower drilling costs, particularly for shallow-water deposits, will ensure Bualuang’s new platform remains cash-generative regardless of whether crude prices recover.
Ophir said Bualuang broke even at US$15 per barrel in 2016 after generating revenues of US$107 million, though this was down from the US$178 million of revenue booked in 2015.
The Topaz Driller jack-up rig is currently delivering Ophir’s 2017 in-fill campaign for Bualuang, aimed at bolstering production and uncovering fresh resources. This includes two development wells that should lift Bualuang’s current production of 8,100 bpd by around 17% to 9,500 bpd.
Ophir will also drill a single “step-out” exploration well to delineate unproven resources in the Bualuang area.
Ophir has budgeted US$12 million for the in-fill wells, which are slated to “pay back” within one year and could add around US$23 million to Bualuang’s net present value (NPV).
Thailand’s proven oil and gas reserves peaked in 2004 and 2006 respectively at around 600 million barrels of oil and 15 tcf (424.7 bcm) of gas, according to US Energy Information Administration (EIA) figures cited by the US-based National Resource Governance Institute (NRGI).
No full licensing rounds have been held since 2008, according to NGRI, though Bangkok is expected to invite bids for the Chevron-operated Erawan and PTT-operated Bongot concessions ahead of their expiry in 2022 and 2023 respectively.
Meanwhile, sustained economic growth has seen Thailand’s energy mix become increasingly reliant on imports, with some 866,000 bpd of crude bought from overseas last year, according to the EIA. Greater imports could inflate energy costs and undermine Thailand’s balance of payments if left unchecked, which should provide upside for the Bualuang expansion on local markets.