Thailand is the recipient of renewed vigor on its exploration and production scene.
Royal Dutch/Shell Group, which looked to be exiting Thailand in 1998, has decided to press ahead with a multiyear spending plan.
Unocal Thailand Ltd. is placing on production the country's first offshore horizontal well.
Chevron Corp. steps into active operations in the country for the first time with the purchase of interests in an offshore block that contains several fields.
Meanwhile, the Khorat plateau of northeastern Thailand is a worthy exploration area that has developed a not fully deserved bad reputation, says a geoscientist with Amerada Hess Exploration (Thailand) Co. Ltd., which operates in the area.
Shell's large programRoyal Dutch/Shell Group, after turning down potential buyers of its concessions in Thailand, has come up with a comprehensive development scheme under which it will spend $370 million during 9 years.
Embodied in the plan is a "rennaissance" of Shell's upstream activities in the kingdom that began in the early 1980s, said Martin Bradshaw, executive director, Thai Shell Exploration & Production.
Shell decided in early 1998 to end its E&P in the kingdom by selling its stake, but it said it would gladly continue operations. The main asset is Sirikit oil field, in Kamphaeng Phet about 400 km north of Bangkok. Bids fell below Shell's price expectation, prompting it to decide in late 1998 to retain the assets, variously valued at about $300 million.
Onshore E&P plansThai Shell plans to spend about $360 million in 1999-2007 to drill as many as 188 wells on the S1 block in Phitsanulok and Kamphaeng Phet area, Bradshaw said.
The plan includes 132 development wells in Sirikit main field, 40 exploration and appraisal wells, 12 development wells in the Pru Krathiam satellite, and four gas wells in its west flank.
This plan is aimed at recovering about 110 million bbl of oil. Thai Shell believes it could recover another 200 million bbl in potential crude reserves when more economical technology is available during the four years starting in 1999.
In other words, Bradshaw said, the exercise is aimed at sustaining Thai Shell's crude oil production at the current level of 23,000-24,000 b/d over the next decade.
By late 1998, Thai Shell had drilled a total of 228 wells on S1, including 50 exploration wells. S1 proved reserves rose nearly 50% in 1998, and late 1998 appraisal successes ensured that additions exceeded production.
Oil production from Sirikit and satellite fields peaked in November 1998, averaging 24,393 b/d, breaking the record set in March 1992.
Output from the Phalang Phet plant, which processes associated gas from Sirikit field into LPG, also set a new high average of 310 tons/day.
Sirikit has produced more than 100 million bbl of waxy "Phet" crude oil since its inception 15 years ago.
Offshore outlookThai Shell is also reviving its attempt to prove oil reserves on 1,300 sq km Block B6/27 in the Gulf of Thailand southeast of Chumphon.
The company plans to spend $10 million to drill two wells. Site of one is 2 km north-northwest of Nang Nuang B01, which is 37 km offshore.
Nang Nuang (sea gull) produced some 10,000 b/d for about 7 months before its production was ceased in August 1997 due to technical problems. It is the country's first offshore oil field.
The other planned well is an exploration well on the Nok Kaew (parrot) prospect. Thai Shell has identified six oil prospective structures on the block.
The offshore wells are to be drilled back to back starting at yearend 1999 or early 2000.
Thai Shell so far has drilled six exploration wells and two appraisal-development wells on B6/27.
Separately, Unocal, Mitsui and PTT drilled what may be the country's first offshore horizontal well. Trat A-07 in Trat field on Block B11 could ultimately produce as much gas as eight conventional wells, said Unocal Thailand Pres. Brian Marcotte.
The well had a 450 m horizontal leg in an 18 m thick reservoir at 1,900 m TVD. It was to start this month at 30-50 MMcfd, with gas processed at Satun. Reserves are pegged at 15-20 bcf.
Chevron's purchaseChevron stepped into Thailand's upstream petroleum prospecting and natural gas industries. It finalized accords to acquire a combined 51.5% stake in Gulf of Thailand Block B8/32 from Rutherford-Moran Oil Corp., Houston, and Palang Sophon, an energy investment arm of Bangkok Bank's Sophonpanich family.
Chevron acquired RMOC's 46.34% interest in 734,000 acre B8/32 for about $91 million. The concession is RMOC's only asset. Chevron paid an undisclosed sum for part of Palang Sophon's interest in the concession. At the same time, Chevron agreed to assume operations of B8/32 in October from Pogo Producing Co., Houston, which continues to hold a 46.5% share.
The immediate effect of Chevron's acquisition is continuation of development of 102,000 acre Benchamas field, feared stalled by financial constraints on RMOC.
About $200 million is needed to finish Benchamas production facilities and complete wells. Roughly half the money will come from Chevron and the other two partners in B8/32.
Benchamas is to come on stream in July at 120 MMcfd of gas and 30,000 b/d of oil, Richard Matzke, Chevron Overseas Petroleum Inc. president, said in Bangkok.
"We see long-term growth potential in the Southeast Asian gas market. We are probably moving more into gas than oil. This B8/32 acquisition is a major component of the strategy that Chevron is more heavily invested in gas resources in Asia," Matzke said.
Chevron aims to engage initially in gas prospecting and later move into processing and distribution as the Asian gas market is deregulated.
Block B8/32 is said to have significant oil and gas potential. Tantawan field has been producing about 80 MMcfd of gas and 7,500 b/d of oil. It started up in February 1997.
A third field, Maliwan, covers 91,000 acres and is to start producing in late 2001. The companies will continue exploring Jarmjuree and hope to seek a production license in 2000.
Matzke said Chevron will further explore the barely touched block.
B8/32 partners have an established contract with Petroleum Authority of Thailand (PTT) to supply a maximum of 300 MMcfd of gas to the state-owned gas distribution monopoly. "We still have another 220 MMcfd to go," Matzke noted.
The acquisition of the majority stake in B8/32 consolidates Chevron's position in the kingdom's upstream oil industry. Chevron has held an interest in three Gulf of Thailand tracts jointly with British Gas and CRA Exploration of Australia.
These are blocks 7,8, and 9 in Thai-Cambodia disputed waters. Chevron took possession when it bought Gulf Oil Corp. in 1984. Unsettled territorial claims have precluded exploration.
"'The potential of gas and oil is there because it is right adjacent to Tantawan and has the same oil and gas sands. But it's not clear how much (reserves)," Matzke said.
Khorat plateau potentialThis "basin" covers about 200,000 sq km in Northeast Thailand and Laos and has only 31 wells on 21 structures.
Several play concepts have been tested there, but platform carbonates of the Permian aged Pha Nok Khao formation are so far the only economically viable reservoirs, John E. Booth said in a comprehensive presentation on the plateau at the Seapex conference in Singapore in December 1998.
Booth said Amerada Hess is appraising Phu Horm gas field, just north of Esso's producing eight well Nam Phong gas field. Mud losses and a gas kick in Chonnabot-1 were interpreted as indicating another significant gas bearing structure.
The closed structure above the lowest tested gas in Phu Horm field is very large, and Amerada Hess plans to appraise the field in 1999 in areas considered structurally more analogous to those that produce high flow rates in Nam Phong field, Booth said. This work is to follow acquisition of infill seismic data.
Source of the plateau's Pha Nok Khao gas is not known for sure, but late Triassic Kuchinarai Group organic rich lacustrine shales are assumed to be the main source. Gas found to date likely has mixed affinities, and Permian Saraburi Group could be contributing.
Capital and exploration spending in the basin totals an estimated $400 million, and the only field, Nam Phong, is attributed ultimate recovery of about 500 bcf of sales gas.
Khorat plateau exploration began in earnest in 1971. A fourth round began in 1997, and there is reason to believe that at least one more round of exploration will occur, Booth said.
Copyright 1999 Oil & Gas Journal. All Rights Reserved.