More Investment to Boost Thai Onshore Crude Output
BANGKOK Sep 25, 2007 (Dow Jones Newswires)
Thailand's crude oil output from inland fields is expected to reach nearly 30,000 barrels a day in the next two years, up by around 5,000 barrels a day from now, but will remain far behind offshore production levels, according to a senior government official.
The Department of Mineral Fuels expects this rise in onshore output to come as a result of between $300 million and $500 million in new investments in the sector, DMF Director-General Krairit Nilkuha told Dow Jones Newswires.
"Investments in onshore fields have become more attractive, thanks to the high level of global oil prices and the geographic structures in the area," Krairit said.
More money is also expected to flow in because of Thailand's 20th petroleum concession round, bidding for which started in May, he added.
The round, which will end in May 2008, covers 56 onshore blocks and nine offshore blocks in the Gulf of Thailand, spanning 235,606 square kilometers.
Onshore oil and gas output in Thailand now comes from 10 oil fields and two gas fields in the central, north and northeastern parts of the country.
The additional crude volumes expected over the next two years are from Blocks L33/43, L44/43 and S1.
Crude oil from these areas is sweet, or low-sulfur, crude with an API of between 30 and 40 degrees, said Krairit.
Block S1, 400 kilometers north of Bangkok, is expected produce 1,000-2,000 barrels a day more, said Krairit. Wholly owned by PTT Exploration & Production PCL (PTTEP.TH), it now produces 20,000 barrels a day of crude and 50 million standard cubic feet per day of gas.
PTTEP has set aside around THB28.13 billion to invest in Block S1 over the next five years to maintain its output above 18,000 barrels a day, a PTTEP official said.
Krairit said that Blocks L33/43 and L44/43 are each likely to add 1,000 barrels a day of crude output the next two years. They are located 300 kilometers northeast of Bangkok and owned by Canada's Pan Orient Energy Corp. (POE.V)
Pan Orient Energy is currently testing flow rates at the Na Sanun field, part of Block L44/43, with these now running at near 1,300 barrels a day.
Testing work will take around three months before the company can evaluate the possible future output levels at the field, Krairit said.
It already produces some 1,000 barrels a day from Block SW1A, located near its other two concessions.
However, Pan Orient Energy declined to give details of its investment and development plans.
Meanwhile, output of natural gas and condensate from onshore blocks in the next two years is expected to maintain unchanged from current levels, said Krairit.
Natural gas output from inland blocks is now around 150-160 million standard cubic feet per day, while condensate production is around 400-500 barrels a day.
At present, Thailand's overall hydrocarbons output comprises about 2.5 billion standard cubic feet per day of natural gas, 140,000 barrels a day of crude oil and 77,000 barrels a day of condensate.
Overall petroleum output is expected to rise by 5% per annum during 2007-2012, in line with the country's energy demand growth, Krairit said.
As of end-2006, proven reserves of natural gas stood at 11.7 trillion cubic feet, condensate at 266 million barrels, and crude oil at 195 million barrels.
Copyright (c) 2007 Dow Jones & Company, Inc.
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