Press reports surfaced early in 2005 that China National Offshore Oil Corp. was considering an offer to acquire Unocal Corp.
Naturally, Unocal declined to comment on the reports, but the company has built a considerable asset base in China's back yard. Looking at the assets Unocal has built in the Gulf of Thailand, for example, could give any Asian company hungry for acquisitions a start.
Unocal built its Gulf of Thailand franchise from scratch. With its original operations limited to gas production, the company has branched out into oil production and electric power generation.
Having produced a gross 6.7 tcfe in Thailand, Unocal sees about 13.2 tcfe of expected remaining inventory there.
Thailand's offshore
Unocal Thailand and partners produced more than 5.5 tcf of gas, 199 million bbl of condensate, and 14.8 million bbl of oil from the Gulf of Thailand from 1981 through mid-2004.
Gross production averaged 1.2 bcfd of gas, more than 41,000 b/d of condensate, and 19,000 b/d of crude oil.
Unocal operates 122 platforms and has drilled more than 2,000 wells since 1981. The platforms host wellheads, production, central processing, living quarters, flare tripods, and gas compression facilities. Unocal has installed nearly 900 km of interfield pipelines, and two Petroleum Authority of Thailand (PTT) pipelines transport the gas to shore.
The company started in Thailand with a concession in the Khorat plateau onshore and made its first offshore discovery, later named Erawan, in 1973. It launched gas production in 1981 and oil production in 2001.
The company is involved with eight blocks that cover 2.9 million acres in the central gulf and three blocks farther south in the Arthit Project that total 988,000 acres.
Today, the company operates 13 gas and condensate fields. Its concession partners are Mitsui Oil Exploration Co. Ltd., PTT Exploration & Production Public Co. Ltd., Amerada Hess (Thailand) Ltd., and Moeco Thai Oil Development Co. Ltd.
Unocal also participates in Blocks 5 and 6 in the Thailand-Cambodia Overlapping Area.
Impact on country
The group's gas is used to generate 30% of Thailand's electric power demand, and the crude oil output is more than 25% of the country's oil production.
More than 75% of the gas produced is burned to generate electricity, and the rest is used for industrial fuel, transportation fuel, cooking gas, and petrochemical feedstock.
The operations have 1,142 company employees, 92% of Thai nationality, and 1,500 contractor employees.
Overall spending was $7.6 billion through the end of 2003, and all partners had paid $1.4 billion in royalties to the government.
Thailand is Unocal's primary gas-producing area outside the US.
The future
Unocal's outlook is for gross gas production to grow from 1.1 bcfd in 2003 to 1.22 bcfd in mid-2006 and 1.6 bcfd (920 MMcfd net) beyond 2006.
The latest estimate is that it could take $9 billion in spending and some 5,700 more wells and 350 wellhead platforms to capture the anticipated remaining resource.
A third gas pipeline, to be filled with gas from Arthit, is to start up in mid-2006 as the company and the country struggle to keep in step with surging electric power demand.
Thailand's electricity demand has grown to 11,000 Gw-hr in 2004 from about 8,000 Gw-hr in 1999, according to figures from the Electricity Generating Authority of Thailand.
Oil production is expected to grow to 40,000 b/d later this year as Unocal implements a second phase of development of Yala and Plamuk fields.
Farther south, Unocal is active in blocks off Viet Nam, where it envisions gross unrisked gas potential of 5-8 tcf.
Those fields could start producing around the end of the decade. Unocal has a concept for a 236-mile pipeline from Kim Long, Ca Voi, and Ac Quy dry gas fields to a planned power plant at O Mon in the Central Mekong Delta.
Unocal also has production in Bangladesh, Indonesia, and Myanmar and exploration in Australia.
