Thailand’s PTT Exploration & Production (PTTEP) will deepen its ties with Malaysia’s state-owned Petronas to develop offshore acreage claimed by both Kuala Lumpur and Bangkok.
PTTEP’s COO, Phongsathorn Thavisin, was quoted by the Bangkok Post on June 1 as saying negotiations on a renewed pact would be finished before the end of the year.
The pair currently co-operate in disputed waters of the Malay Basin, managing Blocks B-17, C-19, and B-17-01, as part of the Carigali PTTEP Operating Co. (CPOC) joint venture.
Blocks B-17 and C-19 contain the Muda, Jengka, Tapi and Amarit fields, and produced roughly 700 bcf (19.8 bcm) of sales gas plus 17 million barrels of condensate in 2010-15.
Thavisin argued further co-operation would allow PTTEP to use the experience it gained from operating Thailand’s Bongkot block in the Malay Basin fields. Bongkot, which comprises several compartmentalised gas reservoirs, accounts for roughly 25% of PTTEP’s sales.
Phongsathorn added that the new venture with Petronas could slash development costs by refining the so-called Gulf of Thailand Business Model (GoTM) used by PTT at Bongkot.
The GoTM supposedly helped daily output from Bongkot soar from 150 mmcf (4.25 mcm) in 1992 to 1 bcf (28.32 mcm) at present, the Bangkok Post said, but Phongsathorn did not disclose how the model works in practice.
The Malaysia-Thailand Joint Area (MTJA) was formed in 1990 and covers 7,250 km of overlap between the Thai and Malaysian maritime claims. Oil profit share is split 50:50 between Bangkok and Kuala Lumpur, and the two governments signed a unitisation agreement in 2011 to encourage further exploration and development.
By 2012, 8.5 tcf (28.32 bcm) of proven and probable (2P) gas resources had reportedly been identified within the MTJA.
Other fields producing within the overlap include those in shallow-water Block A-18, which yielded around 2.6 tcf (73.63 bcm) of sales gas plus 25 million barrels of condensate during 2005-15. A-18 is run by a joint venture between Hess Oil’s Thai unit and Petronas’ PC JDA subsidiary with 50% interest each, according to the MTJA website.
Most to gain
While both PTTEP and Petronas are battling production declines domestically, it is the former that arguably stands to gain the most from identifying fresh gas resources in the MTJA.
Thailand’s gas reserves, including the MTJA, shrank from 12.7 tcf (359.66 bcm) in 2000 to 7.3 tcf (206.74 bcm) in 2015, according to the Department of Mineral Fuels (DNF).
The situation is unhelpful as Thailand relies heavily on gas in its power generation sector and must contend with a national energy demand that is forecast to rise 65.5% to 326,199 GWh in 2016-36.
By contrast, it was the development of marginal Malaysian oil deposits which slowed with the industry depression.
According to the BP Statistical Guide of World Energy, Malaysian crude reserves slipped from 5.3 billion barrels in 2005, to 3.6 billion barrels by December 2015.
Petronas expected crude yields to average 648,000 bpd in 2016, Reuters reported in December 2016, down 14,000 bpd from the 662,000 bpd recorded a year earlier.
The picture is rosier for Malaysian 2P gas reserve, which recovered by an annual 9.1% to hit 7.2 billion boe by the start of 2015, according to Petronas.
This followed the discovery of several deposits offshore Sarawak, before Petronas launched Malaysia’s first floating LNG (FLNG) plant in November 2016.