Chevron Oil and Gas Lease Extended in Thailand

Chevron Corporation has announced that its leases in the Gulf of Thailand have been extended until 2022, according to Chevron. The Thai Government has granted Chevron the right to continue natural gas exploration and production in off shore waters that Chevron hopes will produce in excess of one billion cubic feet of natural gas a day.

Four "blocks" of area in the Gulf of Thailand are the zones in which Chevron will be allowed to operate. Chevron already has a large economic stake in the area, with 60 to 80 percent interest in the offshore drilling currently taking place in the specified area. Chevron will be working through its Thailand-based subsidiary, Chevron Thailand Exploration and Production, Limited. Other Asian subsidiaries of Chevron that will benefit from the newly signed leases are Mitsui Oil Exploration Company (MOECO) and PTT Exploration and Production Public Company.

MOECO is based in Japan and Thailand and has been in business since 1969. Earlier this year, MOECO won a bid for an Indonesian block, and has participated in exploring for ultra-deep gas in the Gulf of Mexico. MOECO also has projects in Vietnam, Cambodia, Oman, Egypt, Libya, and Australia. MOECO provides shipping vessels for Chevron, in addition to having its own platforms in the leased blocks.

PTT is based in Thailand and formed under the authority of the Thai Petroleum Authority in 1985 as a way of securing energy for the small country. PTT struck out on its own and went public in 1992. PTT buys all the natural gas that Chevron produces in Thailand. Currently, Chevron is Thailand's largest crude oil and natural gas producer.

In the press release, Chevron CEO, Dave O'Reilly expressed his gratitude to the Kingdom of Thailand "for its ongoing support and express our commitment to assisting with the long-term expansion of Thailand's energy resources. We consider the Gulf of Thailand to be an exploration and production focus area for the company, and we look forward to working in partnership with the Kingdom to continue to grow our activities here."

Chevron adds that it plans on investing $4 billion in Asian oil fields this year. The Chevron Thailand Exploration and Production President, Khun Tara Tiradnakorn, said in the press release, "The development plan for this area calls for significant investments to create opportunities for further offshore development, boost recoverable reserves and production, and develop the energy resources of the Thai people to assist with long-term economic growth and prosperity."

Chevron already operates close to 200 platforms in the Gulf of Thailand, producing almost 150,000 barrels of oil and 1.6 billion cubic feet of natural gas.

The four blocks in which Chevron has just signed leases are actually on the border of Cambodia and Thailand, and there has been some dispute over which nation holds mineral rights over Blocks 10, 11, 12 and 13. There is no mention of whether the dispute has been settled.

Source: Chevron, Mitsui Oil Exploration Company, PTT Exploration and Production Public Company