PTTEP ends East Natuna exploration

PTTEP ends East Natuna exploration

SET-listed PTT Exploration and Production Plc (PTTEP), Thailand's only
upstream petroleum firm, has quit the East Natuna gas exploration project
after finding it no longer worth the commercial investment, according to a
company statement released yesterday.

Although the company, which partnered with PT Pertamina and ExxonMobil, had
yet to start exploration and production in the Indonesian gas field, PTTEP
conducted feasibility studies from time to time as global energy prices rose
and fell.

The consortium had conducted a technology and market review (TMR) to explore
potential development in the East Natuna block.

"The results of the TMR showed, under market conditions, that
commercialising the hydrocarbon resources in this area would be of
difficulty considering the level of CO2 and remoteness of the area," PTTEP
said. "Therefore, PTTEP chooses not to participate in any further activity
in the East Natuna project."

The Indonesian unit of ExxonMobil previously said it "no longer wishes to
continue further discussions or activity" involving the East Natuna gas
block.

Exxon's exit probably means further delays in developing a field that was
first discovered in the 1970s.

Difficulties with East Natuna have included contract disputes and the
remoteness of the block, which rests on the southern edge of the South China
Sea.

The East Natuna field holds about 46 trillion cubic feet of recoverable gas
resources, according to ExxonMobil, though the supply comes with a carbon
dioxide content of more than 70%, which raises the cost of extracting usable
fuel.

PTTEP has been part of the East Natuna project since 2012. Indonesian state
energy firm Pertamina had expected to sign a production-sharing contract
with PTTEP and ExxonMobil last year.

PTTEP continues to hold a 11.5% stake in Natuna Sea A, which has a current
gross production of 230 million standard cubic feet per day, according to
the company statement.

Malaysia's Petronas and France's Total were previously involved with the
East Natuna project, but they pulled out.

PTTEP shares closed yesterday on the Stock Exchange of Thailand at 84.50
baht, down 25 satang, in trade worth 308.5 million baht.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1290311/pttep-ends-east-natuna-expl
oration

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com