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Economy

Long delayed auction for Gulf of Thailand gas blocks kicks off

Abu Dhabi's Mubadala seen joining incumbent operators PTTEP, Chevron in bid

PTT Exploration and Production said it would bid for the operation of the gas blocks.   © Reuters

BANGKOK -- The Thai government on Tuesday announced auction details for the Erawan and Bongkot gas blocks in the Gulf of Thailand, restarting a process that had been delayed many times over the last few years.

The government will announce the names of the companies that qualify to make bids in May and they will have until September to submit their documents. Gas is the source of more than 70% of power that is generated in Thailand. The winner of the auction will be announced by the end of this year.

Gas from the two fields provide a combined 2,100 million standard cubic feet per day, or around 40% of total gas demand in Thailand. Chevron is the production operator of the Erawan block, while PTT Exploration and Production operates the Bongkot block.

Uncertainties over the expiry of the two gas blocks in 2022-2023, as well as a dozen of auction delays amid political turbulence over the past few years, have prevented the operators from digging new gas wells in the blocks, as supplies gradually became depleted.

Sources at the Energy Ministry said at least three international oil and gas companies are expected to join the bid: PTTEP, Chevron and Abu Dhabi sovereign wealth fund Mubadala Investment Co.

PTTEP Chief Executive Somporn Vongvuthipornchai said the company will join with its current French partner, Total E&P Thailand, to take part in the auction. "We have a good partner and we are confident that we could use our expertise in this business as well as our technology to help develop the Bongkot gas field effectively further," Somporn said in a statement issued on Monday.

He said PTTEP also plans to increase its share in the Erawan blocks, and it is still in negotiations with Chevron. Musabbeh al-Kaabi, chief executive of Mubadala's petroleum and petrochemicals division, was quoted in the Bangkok Post as saying the investment fund was also interested in joining the bid as it plans to expand its existing business in Thailand.

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