Thailand: PTTEP turns to technology options

Thailand: PTTEP turns to technology options

PTT Exploration and Production Plc (PTTEP) plans to emphasise technology to
further cut costs during an extended period of weak oil prices.

Kitisak Nualchanchai, executive vice-president of technology and
sustainability development, said technology should allow it to be more
efficient in production and precise in exploration, reducing waste in the
process.

In the past, PTTEP allocated 3% of net profit for research and development
(R&D) each year, which it believes helped lower its operating cost.

"We set a goal to be Asia's leading E&P [exploration and production] company
in terms of cost effectiveness for the upcoming year," said Mr Kitisak.

Since mid-2014 when it adopted new technology, PTTEP has cut its average
production cost to US$42 to $30 this June.

"We are moving in the right direction. We are dedicated to R&D to lower
costs even further," he said.

In addition to cost reduction, technology has become indispensable as
petroleum resources are harder to discover, said Mr Kitisak. New oil wells
are in different geographical areas such as deep offshore sites, while shale
gas and oil require new technology to make them viable commercially, he
said.

The higher success rate of resource recovery is also a result of using new
technology, said Mr Kitisak.

"We target our new investment in technology improving our success rate in
petroleum discovery to 30% by 2020, up from an average of 20%," he said.

For example, PTTEP used a new technology called a dedicated processing
centre (DPC) for exploration instead of utilising only seismic testing data,
said Mr Kitisak. DPC processes data from seismic tests more precisely,
resulting in more accurate location of petroleum resources and more
production output from existing wells.

"We will use the new technology to increase the recovery factor in the
petroleum reservoirs to 30% by 2031 from 17% currently at our Sirikit and
Bongkot fields in the Gulf of Thailand and our petroleum wells in Algeria,"
he said.

The company also plans to reduce greenhouse gases in its production
processes by 20% by 2020 using remotely operated vehicles (ROVs) and drones.

The plan to use drones and ROVs at its sites saves on costs and is safer for
inspection work at underwater petroleum sites, said Mr Kitisak, avoiding the
use of humans and helicopters.

"Data processed by machines produces less errors than humans do, so we can
expect more precise data from ROVs and drones," he said.

PTTEP has collaborated with Kasetsart University, Chulalongkorn University
and King Mongkut Institute of Technology Thonburi in developing ROVs.

The major petroleum resources of PTTEP are small reserves located in the
Gulf of Thailand including the Arthit and Bongkot fields. The firm applied a
new technology called a minimum facility platform (MFP), using bundling to
maximise output from several small wells.

MFP was started in 2010 and 30 platforms using that technology are
operating. Another 17 units are in development.

PTTEP shares closed Friday on the SET at 80.25 baht, down one baht, in trade
worth 496 million baht.

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Ref:
http://www.bangkokpost.com/business/news/1095009/pttep-turns-to-technology-o
ptions

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com