PTTEP, Shell links sought

In the middle of this year, Shell decided to become a partner with PTTEP, Austria’s OMV and Mitsui & Co (Australia) in the Great South Basin joint venture, which is exploring a deep-water oil and gas field off the Otago coast of New Zealand. Shell now holds half of the project after OMV and PTTEP diluted their shares to 18 per cent each, while Mitsui Australia retains 14 per cent.
Michiel Kool, executive vice president for Asia at Shell Eastern Petroleum, said recently that Shell was talking about the technology in the E&P industry with PTTEP as Shell was now heavily focusing on new oil and gas fields worldwide, including the Asia-Pacific region.
The interesting countries for Shell also include Burma, which has many potential sites for oil and gas E&P.
Also about midyear, Shell decided to move ahead with its Prelude FLNG project in Australia, the world’s first FLNG facility. Shell is expected to produce 3.6 million tonnes of LNG, 1.3 million tonnes of condensate and 400,000 tonnes of liquefied petroleum gas per year.
Anon Sirisaengtaksin, president and chief executive officer of PTTEP, said the company had two or three chances to discuss with Shell the possibility of collaborating in the E&P business. PTTEP always says that it will seek partners to join in that business, particularly in areas where PTTEP does not have expertise such as deep-water oil and gas E&P.
PTTEP is looking for partners to buy shares in the M11 block off Burma’s coast. Besides that field, the company has exploration activities in three blocks – A4, A5, and A6 – in the Andaman Sea. All of them are deep-water oil and gas blocks, so PTTEP would like others to join the projects.
Shell is one of the world’s leaders in deep-water E&P. The Dutch company was PTTEP’s partner in the S1 project in the Gulf of Thailand before selling its 75-per-cent stake to PTTEP eight years ago for US$205 million (Bt6.4 billion).
Anon said the company was also in talks with Shell about FLNG technology, as Shell seems to be the first E&P company that is investing in this field.
“We’re talking with Shell about many businesses. We used to be partners, so it is possible to collaborate in the future,” he said.
Peter Voser, CEO of Shell, said the company would celebrate its 120th anniversary of doing business in Thailand next year. The company is committed to staying here, where it focuses on the retail and biofuels businesses.
Shell is gearing up to invest $100 billion to secure as much oil and gas production sites as possible in order to serve energy demand that is outpacing supply.
FLNG is the area that Shell is promoting and Asia-Pacific is among its targets. Investing in E&P technology is necessary for Shell to produce oil and gas more efficiently, so global oil prices will no longer be low, Voser said.