Unocal unit buys shares in Amoco Thailand Petroleum
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.
By an OGJ correspondent
BANGKOK, Oct. 1 -- 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.
The acquisition represents a strategic move of Unocal to significantly boost its hydrocarbon portfolio in Thailand and neighboring countries such as Viet Nam and Burma, 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 put here 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 lying in 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 understand 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.