PTT Exploration and Production Plc (PTTEP) plans to invest about 120 billion baht ($3.07bn) between now and 2008 to develop and operate 21 projects including the recently acquired S1 petroleum block where the Sirikit oil field is located.

The listed upstream petroleum firm, majority owned by PTT Plc, aims to increase its sales volume by an average of 10 per cent per year from an average of 129,000 barrels of oil equivalent per day (boepd) this year to close to 200,000 boepd in 2008.
According to president Maroot Mrigadat, of the 120 billion baht to be invested, 70 billion ($1.79bn) would be capital expenditures over the five years. Of this, 3.9 billion baht ($100m) would be invested in the S1 project in Kampheng Phet, where the company bought out the remaining interests of Thai Shell Exploration and Production last month.
The remaining amount represents operating costs of existing projects consisting of five now in production, two that will start production in the future and other projects that are now in the exploration stage.
Investment in the the S1 block, starting with the drilling of two appraisal wells and nine development wells this year, would account for 43 per cent of PTTEP’s total investment within five years and could be adjusted upward from the current conservative amount.
Apart from the S1 block, projects under production that would be expanded are the Bongkot and Pailin natural gas fields as well as Burma’s Yadana and Yetagun natural gas projects.
Meanwhile, the Arthit project is scheduled to start gas production in mid-2006 with an expected volume of 330 million cubic feet per day (mmcfd).
Gas production start-up for the Thailand-Malaysia joint development area (JDA) is due in 2008 with a production rate of 250 mmcfd.
Citing increasing global oil prices, Chatchawal Eimsiri, PTTEP’s vice-president for finance and accounting, said the company foresaw no need to raise additional funds to serve its investment plan for this year and 2005, which would require almost 40 billion baht.
The company’s cash on hand amounts to 21 billion baht, of which eight billion would be used for the acquisition cost of Thai Shell’s stake in the S1 field.
“After the payment, we still have 13 billion baht that would be left over and in the current circumstance of favourable oil prices, we would have no problem to generate cash from operations to serve our investments during the next two years,” he said.
Mr Maroot said PTTEP’s revenue projection is based on a conservative projection of oil prices.
In addition to the existing projects, PTTEP has developed and is seeking new overseas opportunities in the Middle East, Asia-Pacific and Africa.
The sales volume from the S1 block is estimated at 28,000 boe/d this year. The project, with existing proved reserves of 82 million barrels of oil estimate per day (boepd) with upside potential of up to 137 million boepd, could produce 19,000 boepd of crude oil, 50 mmcfd of natural gas and 300 tonnes per day of liquified petroleum gas (LPG).
The firm recently confirmed a $205m (Bhat 8-billion) buy-out of Thai Shell Exploration and Production, which has the largest stake in the concession for the country’s largest onshore oil field.
The share-purchase agreement was executed along with PTTEP subsidiary PTTEP Offshore Investment (PTTEPO).