Unocal Thailand Ltd., a unit of Unocal Corp., said it will purchase all of the shares of Amoco Thailand Petroleum LLC, the Thai unit of BP America Production Co.
Amoco Thailand is operator and 50% owner of the concession covering Blocks 5 and 6 in the gas-prone Thai-Cambodian Overlapping Claims Area (OCA) in the Gulf of Thailand.
In other recent company news:
CNOOC Ltd. agreed to buy a 12.5% stake in the reserves and upstream production of the Tangguh joint LNG project in Indonesia from BP PLC in what CNOOC calls an acquisition "complementary to its natural gas strategy."
Williams Cos. Inc. has reached an agreement to sell its ownership interest in the Canadian and US segments of Alliance Pipeline to Calgary-based Enbridge Inc. for $173 million cash.
Westport Resources Corp. of Denver said it has closed the $120 million acquisition of southeast Texas oil and gas properties from Smith Production Inc., Houston.
Unocal's Thailand deal
Unocal's Thai acquisition represents a strategic move to significantly boost its hydrocarbon portfolio in that country and neighboring countries such as Viet Nam and Myanmar, where it has stepped up its upstream exploration and production interests.
Unocal has particularly strengthened its gas-based assets in Thailand where it plans to spend $4 billion over the next decade on top of some $6 billion in capital expenditures it invested there during the last 40 years, the company said. Blocks 5 and 6 cover a combined area of 10,155 sq km in the OCA. Idemitsu Oil & Gas Co. of Japan holds the remaining 50% ownership in the concession.
Although terms of Unocal's purchase of Amoco Thailand were not disclosed, industry observers describe the deal as significant, given the high expectation of substantial gas and condensate reserves underlying the tracts, but the reserves have not been developed during the last 3 decades due to territorial disputes between Thailand and Cambodia.
However, in June 2001, the Thai and Cambodian government signed a memorandum of understanding to provide a framework for resolving the disputes. Under the terms of the MOU, Blocks 5 and 6 are to be delimited by a boundary line into separate Thai and Cambodian parts. Once the boundary issues are resolved, Unocal Thailand expects to begin a 3D seismic campaign in the first year, followed by exploration drilling in the following years.
"Although the final resolution of the OCA will take some additional time to complete, purchasing Amoco Thailand shares shows Unocal's commitment to long-term growth in Thailand," said Randy Howard, president of Unocal Thailand. Blocks 5 and 6 will complement Unocal Thailand's existing gas producing blocks in the gulf, namely Blocks 10, 11, and parts of 12 and 13, Howard noted.
CNOOC Ltd.'s Tangguh deal
The Tangguh LNG project is operated by Indonesian state oil and gas enterprise Pertamina and BP Indonesia in Berau Bay, Irian Jaya. Tangguh consists of three offshore production-sharing contracts and the planned onshore LNG terminal.
Pertamina will own the terminal, which will be operated by a company jointly owned by Pertamina and the PSC partners.
In a heads of agreement on Tangguh, CNOOC agreed to pay BP $275 million to acquire interest in the Tangguh's PSCs. The areas involved are the Berau PSC, the Muturi PSC, and the Wiriagar PSC (OGJ Online, Nov. 7, 2001).
Tangguh project partners have a 25-year supply contract to provide up to 2.6 million tonnes/year of LNG to a planned LNG terminal at Fujian, China, beginning in 2007. The terminal would be built on the coast of southern China, opposite Taiwan.
Construction of the Fujian terminal is expected to start in 2004, and the terminal is expected to be ready to receive LNG in mid-2007, Mark Qiu, CNOOC Ltd. chief financial officer, told reporters in a Sept. 30 conference call.
He also expressed confidence in the market for LNG, saying 2.6 tonnes/year is a "fairly conservative" volume that could provide natural gas for only two or three power plants.
Wei Liucheng, CNOOC Ltd. chairman and CEO, said in a Sept. 27 news release that, "The acquisition of a material stake in the Tangguh joint ventureUwould expand both the company's natural gas reserves and our upstream presence in Indonesia. This proposed acquisition, together with our recently announced proposal to acquire an upstream interest in Australia's North West Shelf's gas project, would be a substantial step in executing our commitment to supplying natural gas to the rapidly growing market in China."
Previously, CNOOC Ltd.'s parent—China National Offshore Oil Corp.—and Guangdong LNG partners selected Australia's North West Shelf venture to supply China's first LNG imports terminal planned at Guangdong in southern China (OGJ, Aug. 19, 2002, p. 9).
Enbridge buys Alliance stake
A unit of Williams's gas pipeline subsidiary held a 14.6% interest in the 1,900 mile Alliance system, which extends from western Canada to Chicago.
The transaction marks the most recent of several such divestitures that the Tulsa-based firm has revealed in recent weeks.
"This is the third transaction we've announced over the past 8 days related to asset sales that are already completed or in progress," said Steve Malcolm, chairman, president, and CEO. Williams expects the sale to close in 60 days.
The company said that it will, however, retain its interest in the Aux Sable natural gas liquids plant, which processes all gas transported on the Alliance system.
Westport closes deal
Westport's acquired properties, which hold an estimated 76 bcfe of proved reserves—82% of which is natural gas—are in Liberty, Hardin, and Jasper counties in Texas.
Westport said that it will serve as operator of the bulk of the properties, which include 10,000 net undeveloped acres. The acquisition also included interest in 300 sq miles of 3D seismic data.
In August, the acquired properties produced about 29 MMcfed net to the interests. Through the second quarter of this year, Westport's average production was 354 MMcfed, it said.
"We believe this transaction allows Westport to assume an operating position in a prolific area yielding significant exploration and exploitation success," said Donald Wolf, chairman and CEO. "We expect ongoing 3D seismic processing and interpretation to identify additional opportunities to increase production and reserves," he said, adding, "Currently, we have one rig drilling in the area and expect to drill up to 10 exploratory prospects over the next 12-24 months."