Thai PTTEP To Buy Shell Unit Tuesday

Thailand's PTT Exploration & Production PCL has agreed to buy the entire stake of Shell's local petroleum exploration and production unit.

We've reached an agreement to purchase the entire stake of Thai Shell Exploration and Production Co. Ltd.," Maroot Mrigadat, PTTEP's president told Dow Jones Newswires. He declined to give details on the value of the deal, but said the share purchase agreement will be signed on Tuesday.

The main assets of Thai Shell Exploration include Block S1, Thailand's largest onshore oil field, Block L22/43 and Block B6/27.

PTT Exploration already owns 25% of the S1 field in a joint venture with Thai Shell Exploration & Production which controls a 75% stake. The investment in Block S1 so far is around US$850 million.

The S1 field produces about 20,000 barrels of crude a day. It also produces 55 million cubic feet a day of natural gas and 300 tons of liquefied petroleum gas a day. The two companies are also jointly control Block L22/43, a smaller onshore oil field, which is now being explored. PTT Exploration has a 35% stake in the project and the local Shell unit controls 65%.

Thai Shell Exploration the sole owner of Block B6/27, another field located in the Gulf of Thailand. However, the field is not operational since 1997 due to technical difficulties.