On 24 April 2018, Thai Minister of Energy Siri Jirapongpha officially launched the auction of the producing Bongkot and Erawan gas and condensate fields after the National Energy Policy Committee, headed by Prime Minister Prayut Chanocha, had approved the terms of the auction which includes the condition that both fields must produce at a combined rate of least 1.5 Bcfg/d at gas prices not higher than current levels for a 10 year period with a minimum of US$ 4 billion and US$ 2 billion to be invested in the Bongkot and Erawan fields respectively. As of February 2018, the average price of gas per MMBtu from the Bongkot Field was US$ 6.34 (200 Thai Bhat) with gas from Erawan priced at US$ 5.07 (160 Thai Bhat). The DMF’s 2016 1P gas resource estimates for the Bongkot and Erawan fields have been placed at 1.38 Tcf and 0.43 Tcf respectively.
Veerasak Pungrassamee, the director of the DMF, announced that pre-qualification evaluation documents and data rooms for the auction will be available from 30 April-1 May 2018 with the submission deadline to participate in the auction scheduled for 15-16 May 2018. The screening period of the bids is expected to be between September-November 2018 with winning bids expected to be announced in December 2018 and official signing of the contracts for both blocks planned for February 2019. The blocks will be renamed and awarded as G 2/61 for Bongkot and G 1/61 for Erawan. Mr Veerasak added that bids for the auction may potentially be evaluated with a 65% weightage on the proposed gas prices and a 35% weightage on benefits to the state. In 2016, the fields produced at a combined rate of approximately 2.1 Bcfg/d with Bongkot producing 0.86 Bcfg/d and Erawan producing 1.24 Bcfg/d. The Bongkot Field is located within the B15-B17 concessions with the Erawan Field located within the B12 concession.Operator PTT Exploration and Production plc (PTTEP) and partner Total E&P Thailand, a wholly owned subsidiary of Total SA, are potentially planning to jointly bid to continue operating the Bongkot Field after its expiry in 2023. PTTEP had previously increased its rightholding to 66.67% by acquiring former partner Royal Dutch Shell Plc’s 22.22% equity. Total holds the remaining 33.33%. Mr Jirapongpha had indicated that Chevron Corp, the current operator of the Erawan Field, had expressed interest to continue as the operator after the concession expires in 2022. Equity in B12 is split between Chevron (71.25%), Mitsui Oil Exploration Co Ltd (23.75%) and PTTEP (5%) with PTTEP planning to increase its equity stake.
Abu Dhabi based Mubadala Investment Co is also understood to have also expressed interest in joining the auction in a bid to expand its existing business in Thailand. The auction, initially announced on 8 November 2016 with results planned to be announced by September 2017, was postponed to December 2017 with results expected in 2018 due to delays in the approval of the modified Petroleum Act. Subsequently, Thailand’s parliament approved an amendment to the Petroleum Act on 30 April 2017, that came into effect in late June 2017, that gave companies more options for exploration and production operations in Thailand such as negotiating production sharing agreements (PSA) or service contracts instead of the traditional concessions format. Unconfirmed initial decommissioning costs for the facilities within the fields had been estimated at US$ 7 billion.
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