PTTEP of Thailand, the oil and natural gas producer, has reduced its spending plans for the rest of 2020, though would remain on track with key investments in projects such as Mozambique LNG and development of the company’s largest ever southeast Asian natural gas discovery in the Lang Lebah field offshore Sarawak.
PTTEP, whose official name is Exploration and Production Public Company Ltd, noted in its latest newsletter to shareholders that it had adjusted investment plans to cope with the impact from the Covid-19 pandemic that suppressed domestic energy demand.
PTTEP said its 2020 expenditure has been reduced by 15-20 percent with some exploration activities deferred, while maintaining reasonable capital expenditure levels to ensure the continuity of the energy supply of the country.
In the LNG sector, PTTEP has an 8.5 percent stake in the Area 1 licence of the Rovuma Basin offshore Mozambique in southeast Africa.
Part of the overall stake, about 26 percent, was transferred to French major Total from Anadarko Petroleum of the US as a side-deal to the Occidental Petroleum takeover in 2019 of Anadarko.
PTTEP in 2019 also made a Malaysian acquisition from Murphy Oil of the US, including a large stake in the Rotan natural gas discovery offshore Malaysia, which is subject to a floating LNG joint venture.
“PTTEP will continue with investment in development projects such as Mozambique Area 1 and additional drilling activity in the Malaysian Lang Lebah gas field in Block Sarawak SK410B, to ensure the first production of these projects in the next four years as planned,” stated the Thai company.
PTTEP’s Lang Lebah gas field is the largest commercial discovery of petroleum resources it has ever made in what was its first exploration well at the Sarawak SK410B Project just over a year ago.
The natural gas discovery at Lang Lebah-1RDR2 encountered 252 metres of net gas pay and has an estimated several trillion cubic feet of gas in place.
The SK410B project is located in shallow waters about 90 kilometres offshore Sarawak in PTTEP acreage of around 1,870 square kilometres.
PTTEP in its post Covid-19 and oil crisis review revised downwards its overall estimated sales volume in 2020 to 362,000 barrels of oil equivalent per day, a decrease of 7 percent overall from the previous target.
However, the company said it was staying on track with its current investments and was also ready to spend on expansion.
“After the oil price crisis, PTTEP is ready for investment opportunities as we follow our strategic expansion plans that emphasize Southeast Asia where we have built expertise and experience and in the Middle East,” said the company.
PTTEP said it had expanded investment in Thailand, Malaysia, the United Arab Emirates and Oman for short and long-term gains as well as acquired projects that immediately generate income.
The company was also prepared for digital transformation through investment in new businesses that will enhance technical performance.
“Through these strategies, we aim to achieve solid growth and maintain Thailand’s energy security in the long term,” said the company.
The PTTEP update also included a mention of the company’s celebration of its 35th anniversary.
A ceremony was held at PTTEP headquarters in Bangkok to mark its founding in 1985 with the mission as a state-owned petroleum exploration and production enterprise to strengthen national energy security.
The event was attended by senior board members and executives.
They were led by Prajya Phinyawat, Chairman and Head of the Independent Directors Committee of PTTEP, Tongchat Hongladaromp, Advisor to the Board and former PTTEP President, as well as Phongsthorn Thavisin, the current President and Chief Executive.
