UNOCAL EYES $1.75 BILLION IN OUTLAYS OFF THAILAND

Unocal Thailand and partners expect to spend as much as $1.75 billion developing natural gas off Thailand the next D years. That's in addition to $3.3 billion Unocal and partners have spent off Thailand to date. Unocal expects to drill as many as 50-60 wells/year to maintain its Offshore Thailand gas production of at least 800 MMcfd.

Aug. 16, 1993

3 min read

Unocal Thailand and partners expect to spend as much as $1.75 billion developing natural gas off Thailand the next D years.

That's in addition to $3.3 billion Unocal and partners have spent off Thailand to date. Unocal expects to drill as many as 50-60 wells/year to maintain its Offshore Thailand gas production of at least 800 MMcfd.

Unocal Thailand Pres. Brian Marcotte said his company's focus is to maintain a secure gas supply to Thailand the next 10-15 years, with a target of 900 MMcfd by 2000. Natural gas from Unocal operated fields in the gulf currently fuels about 35% of Thailand's electric power supply.

About 45% of Unocal Thailand revenues generated from Thai gas/condensate sales is reinvested in gas field development, Marcotte noted, very high by industry standards.

RESERVES GROWTH TARGETED

The company is trying to boost its gas reserves, currently estimated at 7 tcf of combined proved, probable, and possible reserves. That accounts for an increasing emphasis on onshore Thailand prospects.

Unocal recently started a four well drilling program on its concessions in Northeast Thailand that covers a total area of 9,550 sq km. The first well spudded is in Mukdahan province. A Northeastern prospects have big potential but drilling conditions are more difficult, Marcotte said, adding that the onshore emphasis does not signal a shift away from gulf potential.

Unocal also is interested in Gulf of Thailand acreage in the joint development area offered by Thailand and Malaysia and in disputed waters claimed by Thailand, Cambodia, and Viet Nam. The latter three countries are in the process of resolving their disputed offshore territorial claims, with U.S. companies' involvement in Viet Nam still problematic (OGJ, June 14, Newsletter).

"It's clear that American companies are at a disadvantage once the U.S. embargo is lifted," Marcotte said. "I think it is difficult, perhaps impossible, for U.S. firms to catch up."

REDUCED DELIVERIES

Meantime, Unocal Thailand stands to lose more than $36 million in revenues because of an 18% cut in offshore natural gas sales volumes that was to begin late last month.

The reduction to 700 MMcfd from 850 MMcfd results from having to accommodate the Total group's start-up of Bongkot gas field last month at 150 MMcfd (OGJ, July 26, p. 26). Petroleum Authority of Thailand's (PTT) 425 km trunk line, linking Unocal's Erawan gas field in the central Gulf of Thailand, has capacity of 850 MMcfd. Bongkot is linked with Erawan via a 172 km, 32 in. pipeline.

PTT Senior Vice Pres. Paramaporn Kraikrish expects the reduction in Unocal deliveries will last 4-5 months. Probably by October, PTT is expected to resume normal gas offtake from Unocal when Bongkot gas is diverted to Khanom on the Thai peninsula with start-up of a new, 161 km, 24 in. pipeline.

Unocal will use the opportunity to conduct maintenance work on its offshore gas production facilities.

Unocal's contracts with PTT stipulate that PTT must take a minimum of 500 MMcfd under a take or pay arrangement.