PTTEP Inks Gas Sales Deal in Oman

PTT Exploration and Production Public Company Limited signed Heads of Agreement for Gas Sales of Shams Gas Field in Block 44 with the Government of Sultanate of Oman.

The signing ceremony was held this morning at Government House in Bangkok and was witnessed by Prime Minister Thaksin Shinawatra and Minister of Energy Mr. Prommin Lertsuridej.

The Heads of Agreement was signed by Mr.Maroot Mrigadat, President of PTTEP and Dr. Mohammed Hamed Saif Al-Rumhy, Minister of Oil and Gas, Sultanate of Oman. Under the agreement, PTTEP Middle East Company Limited (PTTEP ME), a subsidiary of PTTEP, will sell natural gas to the Ministry of Oil and Gas, Sultanate of Oman, at the volume of 50 million standard cubic feet per day, starting by the fourth quarter of 2005. The Heads of Agreement also covers principal conditions of the Gas Sales Agreement which will be signed in the next few weeks, including sales volume, gas quality, time of delivery and gas prices.

PTTEP President Mr. Maroot Mrigadat said "The development of Shams Gas Field in Block 44 is a significant step forward for PTTEP as a prudent operator in a foreign country. Block 44 has a very good hydrocarbon potential; PTTEP is currently drilling an exploration well in the southern part of Block 44 targeting for oil. Gas and oil found in Oman will give PTTEP another channel to bring to Thailand more foreign exchange." The Shams Gas Field has indicated its potential since 1978. After PTTEP ME acquired the rights to become an operator of Block 44 on July 21, 2002, the re-testing was conducted at the Shams Gas Field to confirm its reserves for production. Good production tests as well as the policy of Thai's Ministry of Energy to support the exploration and production activities of PTTEP overseas and the policy of the Government of Sultanate of Oman which requires natural gas to meet its rising gas demand, encourages PTTEP to develop this field.

The Shams Gas Field is located in a high potential area. The field not only delivers natural gas, but also approximately 3,000 barrels of condensate per day. PTTEP plans to invest approximately US$ 50 million to develop Shams Gas Field in 2005 and will drill two more development wells for gas and condensate production which is expected to come on stream later this year.