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Published on August 4, 2007

PTTEP president Maroot Mrigadat said partners would reduce risk in the expensive venture. The company needs an investment of around US$1 billion (Bt33.8 billion) to start up gas production.

Moreover, it needs potential alliances to expand its businesses in various countries. The Burmese government is sharing 20 per cent of the investment in M9.

Due to its support for PTTEP's expansion in Oman, the Oman Oil Company will be granted 5 per cent as a non-operating partner. However, it has to wait for Burmese government approval, which is expected to come in this quarter.

Maroot said that there were many companies interested in joining the gas production project. "We prefer a company that offers to invest by swapping its assets with us because this would function as indirect expansion," he said.

The project plans to drill four exploration and appraisal wells in December at another exploration area to confirm the natural gas potential at M9. Work is expected to be completed by April.

The company is in the process of estimating the preliminary reserves in the existing structure where exploration has been completed. It expects to pump 1.5 trillion cubic feet of natural gas.

The M9 gas field is expected to begin producing gas for domestic use in 2011 or 2012.

Meanwhile, PTTEP's investment this year will be lower than planned due to the baht appreciation and delays in some projects. It planned to spend Bt74.512 billion, based on a rate of Bt36 per dollar, at the beginning of this year.

Of the total investment, 70 to 75 per cent will be paid in dollars. Therefore, if the company estimates its dollar investment based on Bt34 per dollar, it will save around Bt3 billion this year.

He said the company was reviewing all projects that were completed at the end of this month.

Maroot accepted that PTTEP might not achieve its target sales volume of 188,000 barrels of oil equivalent (BOE) per day this year because of suspended production in Oman and a falling off of production capacity at the Nang Nuan project.

Yesterday the company posted its production capacity as 179,000 BOE per day.

PTTEP generated revenue of Bt41.403 billion in the first half, declining 5.2 per cent from the same period last year due to loss from the exchange rate. But its sales volume was up 2.1 per cent.

Its drilling success ratio in the first half was 14:17 or around 82 per cent.

Chalida Ekvitthayavechnukul

The Nation