PTTEP Siam temporarily suspends operations in S1 project areas in Thailand

PTT Exploration and Production Public Company’s (PTTEP) subsidiary PTTEP Siam has temporarily suspended all operations in the land reform areas in the S1 onshore project in Thailand.

The decision follows the Supreme Administrative Court of Thailand overturned the Agricultural Land Reform Committee’s order that allowed the use of natural resources in areas of land reform for purposes other than agriculture.

Accordingly, all the onshore concessionaires were instructed by the Department of Mineral Fuels of the Ministry of Energy (DMF) to temporarily cease petroleum operations in the areas of the Agricultural Land Reform.

The S1 project encompasses the area of Sukhothai, Phitsanulok and Kamphaengpet provinces, in which PTTEP and PTTEPS hold 100% participating interest.

The average 2016 sales volumes of crude oil were reported to be around 27,351 barrels per day, while liquefied petroleum gas (LPG) sales volumes stood at about 264 tonnes (t) per day.

The corresponding sales volumes for natural gas stood at about 21 million standard cubic feet per day.

The project was acquired from Thai Shell Exploration & Production Company in 2004 and operations have continued since then.

As a result of a Royal decree on land reforms issued in 1993, the project area overlapped with land areas controlled by the Agricultural Land Reform Office (ALRO).

Thai Shell held the concession rights to the project area and sought permission from the ALRO in 2000 to use the land.

After securing the requisite approval, the company sold the project to PTTEP, which assumed operatorship and continued to periodically submit land usage permission requests in accordance with regulatory requirements.

The temporary suspension of operations is expected to lead to a decrease in crude oil sales volumes of around 15,000 barrels per day, LPG sales volumes of about 130t per day and natural gas sales volume of around ten million standard cubic feet per day.