Chevron Thailand Exploration and Production Co is conducting a joint study on ways to reduce costs during the development of the offshore Ubon petroleum field in the Gulf of Thailand, which has the potential to become a new oil source.
The company, together with two co-investors in the Ubon project, is aware a huge amount of money is required to build new oil production infrastructure as existing facilities are mostly used for gas production.
Chevron made a 35% investment in the project, with 60% invested by PTT Exploration and Production Plc (PTTEP) and the remainder funded by Mitsui Oil Exploration.
The study will look into an engineering design and an investment decision.
Chevron believes Ubon has potential for commercial development and becoming a new petroleum project of the company after its right to operate gas production at the Erawan field in the Gulf of Thailand expired earlier this year, said Chatit Huayhongtong, president of Chevron Thailand Exploration and Production.
Ubon is located within the Pailin petroleum field in the lower part of the Gulf of Thailand. Ubon includes Blocks 12/27 and G7/50, with a production area spanning 2,713 square kilometres.
The co-investors in the Ubon project previously prepared to bid for engineering, production and construction contracts in 2013, but Chevron decided to postpone the final investment decision in 2015 due to a fall in oil prices.
The company re-evaluated the feasibility of the project again in 2016, which led to a study of ways to reduce petroleum production costs.
The transferring of Erawan gas field to a new operator, PTTEP, leaves Chevron with two petroleum fields -- Pailin and Benchamas, which is also located in the Gulf of Thailand.
These two fields have a combined daily production capacity of 480 metric million cubit feet per day of gas, 16,559 barrels of condensate and 7,499 barrels of oil as of June.
Condensate, usually separated from natural gas stream, is made up of light liquid hydrocarbons, similar to a very light crude oil.
The 10-year concession to operate Pailin is scheduled to expire in 2028. Chevron is waiting for the Department of Mineral Fuels to announce its concession renewal.
"Extending the production period at the Pailin field will increase the possibility for further development at the Ubon field. This will eventually contribute to Thailand's energy security," said Mr Chatit.
