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Published on October 23, 2007

 This follows Cabinet approval for a 10-year renewal of the petroleum-production contract covering the area.

President Maroot Mrigadat yesterday said that by 2011, PTTEP expected to increase the Bongkot Field's output 300 million cubic feet of natural gas per day for a total of 900 million cubic feet a day.

"The extension [of the production contract] will pave the way for further investment of more than Bt100 billion in the northern and southern parts of the Bongkot Field," he said.

In return for the contract, PTTEP will pay more than Bt40 billion in royalty fees, petroleum taxes and other fees to the government, Maroot said.

The contract is held by a consortium owned 44 per cent by PTTEP, 33.3 per cent by Total Exploration and Production and 22.22 per cent by BG Asia Pacific. It covers Blocks 15, 16 and 17 in the southern Bongkot Field.

Development plans currently provide for construction of production, living quarters and well-head platforms to tap the seabed reserves beneath the three blocks.

The Bongkot Field holds the largest proven natural-gas reserves beneath the Gulf of Thailand. At present, PTTEP produces 600 million cubic feet of natural gas and 18,000 barrels of condensate per day from the northern part of the field, accounting for 20 per cent of Thailand's domestic consumption.

More natural-gas production is crucial for Thailand's economy, because the Kingdom imports nearly 90 per cent of its fuels. The country is in the process of conversion to alternative fuels - including natural gas - to help protect the economy from constantly escalating oil prices.

Today, petrol prices will establish yet another record when 95-octane petrol is increased 40 satang a litre to Bt30.74. The previous record was Bt30.59, in August 2006. Diesel will rise to Bt27.74 per litre today. Its record high was registered in July 2006, when the fuel cost Bt27.94 a litre.

PTT senior executive vice president Chaivat Churitti said low marketing fees gained as a component of retail prices, combined with continual spikes in global oil prices, meant PTT had to shoulder a loss of Bt30 million from its retail business each day. For every litre of fuel sold, PTT suffers a loss of Bt1.53, he said.

Dubai crude oil yesterday climbed to US$79.50 (Bt2,700) per barrel. Finished petrol was $91.51 a barrel and finished diesel $97.59. A barrel is an international measure roughly equal to 159 litres.

Helping push oil prices to new record highs are violence in northern Iraq, rising demand for petrol in China and lower worldwide reserves of both petrol and diesel.

 The Nation