Pattaya Daily News

20 January 2011 :: 12:01:54 pm 49107

PTTEP ups five-year investment budget

PTT Exploration and Production will invest about Bt562 billion in oil and gas projects from 2011 to 2015.
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The company will also continue seeking merger and acquisition opportunities in order to triple output from 300,000 barrels per day currently to 900,000 by 2020, as planned.

PTTEP also sees bright prospects for continuing its Montara contract off Australia’s northern coast and hopes to start pumping oil in the final quarter of this year.

President and CEO Anon Sirisaengtaksin yesterday said the company’s five-year investment budget was much higher than the previous projection, as PTTEP had acquired a 40-per-cent stake in Statoil Canada Partnership, which owns Kai Kos-Dehseh Oil Sands (KKD) in Canada.

It has to pay US$2.28 billion (Bt69.4 billion) for the stake, as well providing an investment budget to increase KKD’s production capacity from 10,000 barrels per day now to 100,000 within the next five to six years.

“The [overall] investment budget during 2011-2015 will increase by Bt8 billion to Bt9 billion from the previous estimate. We have to pay the remaining 85 per cent of the amount we agreed for the 40-per-cent stake [in KKD], or around Bt58 billion this year.

“We paid 15 per cent last year,” he said.

He said PTTEP would return to focus on investing in conventional oil and gas after acquiring two unconventional projects – KKD and a floating liquefied natural gas (FLNG) project in Australia.

Conventional oil and gas exploration and production requires a lower investment than unconventional operations, but provides a faster return on investment.

“Unconventional oil and gas exploration needs a huge budget at the preliminary stage. We have to be cautious when investing in this field. So, we may not have [another] huge investment like KKD over the next five years. We will extend the business cooperation with Statoil in |conventional oil and gas,” Anon |said.

He added that the Bt562-billion investment budget through to the end of 2015 did not include M&A deals, the FLNG project or new projects the company is discussing with partners.

 

PTTEP targets the production of an equivalent of 265,000 barrels in oil and gas per day this year, increasing from 230,000 in 2010. The output from existing and firm projects will rise to 316,000 barrels per day by 2015.

Anon said PTTEP was in the process of inviting other investors to buy stakes in Burma’s offshore oil and gas block, including M9, for which it has the concession, as the company plans to reduce its stake from 100 per cent to 45 per cent.

The Burmese government will be offered a 15-per-cent stake in the block, so PTTEP will try to sell 40 per cent to other investors.

Christopher Pungya Kalnin, adviser to the president and CEO for corporate strategy, said that if the Australian government allowed the company to continue oil and gas exploration and production in Montara, it would start producing oil in the final quarter with a capacity of 35,000 barrels per day.

This is the best-case scenario for operational resumption following the accident at the well in 2009. The company earlier planned to resume operations in the first half of this year, but had to defer the plan as the Australian government did not |make a decision late last year as expected.

However, PTTEP also acknowledges the possibility that the Montara contract will be cancelled, he said, adding that the Australian government is expected to make a decision by the end of March.

In the event of a contract cancellation, the company can appeal within 28 days to the Federal Court and High Court in Canberra.

PTTEP has set aside a reserve of 2.2 million Australian dollars (Bt67.4 million) for compensation and penalties in connection with the Montara accident.

Report by: www.nationmultimedia.com

Category : Thailand News

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