Monday, November 5, 2007

Thailand seeks Cambodian oil

Thais revive talks with Cambodia


Talks between Thailand and Cambodia on the joint development of petroleum resources are likely to resume early next year after a decade-long delay, according to Krairit Nilkuha, the director-general of the Mineral Fuels Department.

The two governments have long been at odds over exploration and development in overlapping offshore territories. A deal appeared imminent in 1997 but plans were scrapped because of the Asian economic crisis.

Mr Krairit said the timing was right to promote petroleum exploration and production in the area, given the soaring costs of imported oil and volatility in world prices.

At issue are nine exploration areas, designated as Blocks 5 to 13, in the overlapping claims area. Thai officials believe they could contain abundant gas and oil reserves since some blocks are located close to highly productive fields operated by Chevron and PTT Exploration and Production Plc.

Any agreement between Thailand and Cambodia is likely to be modelled on the Thailand-Malaysia Joint Development Area (JDA), in which each country holds 50%. Thailand is represented by PTT Plc and the Malaysian partner is the state energy company Petronas.

Amerada Hess and Petronas Carigali, the joint operators of the JDA, recently informed the Mineral Fuels Department that field A18 would be ready to start pumping natural gas in February, at a rate of 390 million cubic feet per day (mmcfd).

PTTEP has also confirmed additional supplies of 330 mmcfd from its Arthit field in the Gulf of Thailand off Songkhla, which would be available starting in February.

Mr Krairit said the new output would ensure natural gas supply to serve the high demand of the industrial and electricity sectors at a time when other sources remain uncertain.

The country wants to import more liquefied natural gas (LNG) to feed power plants by 2011 but has been unable to secure deals with potential suppliers from the Middle East.

Meanwhile, the government has attracted bids for exploration licences in 28 of the 65 blocks that have been on offer since earlier this year. Of the 28 blocks, 20 are onshore and the rest offshore.

Authorities expect around three billion baht in capital investment to be made in exploration between 2008 and 2010.

Mr Krairit said new bids could also be called for at least 40 petroleum fields that previously had been deemed not commercially viable. Improved exploration technology, combined with the prospect of high oil prices, are seen as making previously marginal fields more attractive to investors.

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