PTTEP Inks Arthit Gas Sales Agreement

PTT Exploration and Production Public Company Limited, as the Operator of Arthit Gas Field, will sign a Heads of Agreement with PTT Plc., covering the sale of gas from the Arthit Field.

Mr. Maroot Mrigadat, President of PTTEP said "This Agreement covers the major terms of gas sales such as volume, quality, production start-up date and gas price. It also conforms to the government policy in securing a long-term gas supply and reducing energy cost while providing reasonable return on investment for the gas producers. This Agreement will enable PTTEP to proceed with the detailed engineering design of production facilities and commit the required investment while the final Gas Sales Agreement is being prepared for review and approval by the Petroleum Committee and the Ministry of Energy."

"PTTEP will spend approximately 26 billion baht during 2003-2007 for Arthit's development phase, including construction of 1 living quarters platform, 1 production platform and 5 wellhead platforms as well as the drilling of 66 appraisal and production wells. Gas Production at the rate of 330 million cubic feet per day is planned to start in 2006 after the completion of the 3rd gas pipeline of PTT Plc. This will result in an increase in PTTEP sales volume of 47,000 barrels of oil equivalent per day. Since Arthit Gas Field has high potential, PTTEP and our partners will conduct further exploration and production in parallel in order to meet rising gas demand in the future."

On the same date, PTTEP will also sign the Memorandum of Understanding on condensate sales to agree in principle about selling condensate produced from this field to PTT Plc.

Arthit Gas Field, part of Navamindra Petroleum Area, is situated in Concession Blocks B14A, B15A and B16A in the Gulf of Thailand. This field, covering a production area of approximately 3,451 sq. km., is 230 k.m. off Songkhla's coast and adjacent to Bongkot Gas Field. PTTEP, as the Operator, holds 80% interest while Unocal Thailand Co., Ltd and MOECO Thailand Co., Ltd. hold 16% interest and 4% interest respectively. The joint venture partners have already drilled 21 exploration wells during 1999-2001 with promising discoveries of gas and condensate.