By an OGJ Online Correspondent
BANGKOK, Mar. 5�Unocal Thailand Ltd. will reduce annual capital spending on its extensive gas development off Thailand in line with the country's stagnant demand for its gas.
The Unocal Corp. subsidiary's 5-year plan indicates annual capital investment leveling off from a peak of $380 million this year to $250 million in 2005. Capital investment for 2002 is $310 million, $280 million in 2003, and $260 million in 2004. Capital investment in 2000 was $242 million.
"We will be investing cautiously over the next 5 years in line with the Thai gas market," said Tara Tiradnakorn, Unocal Thailand vice-president for operation.
But the $1.48 billion capital expenditure planned by Unocal Thailand in 2001-2005 is still regarded as significant and the largest by the kingdom's industry standards.
Memories and fallout from the 1997 Thai economic crisis has hindered growth in domestic gas demand. Also, Petroleum Authority of Thailand's move to raise gas imports from Myanmar, which have fallen far below contractual volume, will restrict gas production from Unocal fields in the Gulf of Thailand (OGJ Online, Dec. 11, 2000).
These two key factors have kept predicted petroleum exploration and production in Thailand over the next 5 years at a relatively level pace.
Unocal Thailand, the country's largest gas producer, projects the country's total natural gas demand will grow 7.5% per year between 2000-2004, or to 2.669 bcfd in 2004 from about 2 bcfd in 2000.
As a result, Unocal aims to reduce its gas production this year from 13 operating fields in the Gulf of Thailand to 921 MMcfd from 1.05 bcfd last year.
Gas production in the next 4 years is projected at 976 MMcfd in 2002, 1.07 bcfd in 2003, and 1.075 bcfd in 2004 before returning to 1.07 bcfd in 2005.
However, Unocal intends to boost production of condensate to 37,000 b/d in 2005 from 28,000 b/d this year. Planned condensate production in 2002 would be 30,000 b/d, 33,000 b/d in 2003, and 38,000 b/d in 2004.
Meanwhile, it plans to begin crude oil production from its Gulf of Thailand fields later this year, beginning at 4,000 b/d, ramping up to 15,000 b/d next year, and sustaining that rate until 2005.
Tara said heavy capital expenditure planned for this year will mainly go toward the phase 2 development of North Pailin and a crude oil production project at fields known as Plamuk, Yala, and Surat.
He said existing reserves proved at Unocal Thailand's concession blocks will allow it to produce gas and oil for more than 30 years. Hydrocarbons reserves at existing fields have also been growing, and there are additional reserves contributing from new concession areas in the Gulf.
Cumulative gas production from Unocal Thailand's operated fields since 1981 to last January were 4.26 bcf plus 154 million bbl of condensate.
More than 1,450 wells have drilled in Unocal Thailand's concessions, mostly in the gulf. Accumulated expenditure by the firm and its parners reached $5.9 billion by 1999.
Meanwhile, Unocal Corp. announced that it increased worldwide reserves by 4% at the end of last year to 1.72 billion boe.
The firm's estimated proved reserves of crude oil, condensate and natural gas in the Far East rose 4.5% to 920 million boe at the end of 2000.
