PTTEP suspends operations of S1 petroleum project in land-reform areas

According to a PTTEP filing to the Stock Exchange of Thailand on Monday, the cessation of operations follows the Supreme Administrative Court's revocation on June 1 of the Agricultural Land Reform Committee’s order to allow the use of natural resources in areas under land reform for any purposes other than agriculture. 
As a result, the Department of Mineral Fuels (DMF) of the Energy Ministry has instructed all onshore concessionaires to suspend petroleum operations in areas under the oversight of the Agricultural Land Reform Office (ALRO).
PTTEPS acquired the project from Thai Shell Exploration and Production Company (Thai-Shell) in 2004. As a result of a 1993 royal decree on land reform, the project area overlapped with land areas under the oversight of the ALRO.
In 2000, Thai-Shell applied to the ALRO for permission to use the land, per the ALRO’s regulatory procedures. Having acquired the project in 2004 from Thai-Shell, which had received consent from the ALRO to use the land, PTTEP assumed operations and continued periodically to submit land-usage permission requests per regulatory requirements.
The S1 Project covers areas of Sukhothai, Phitsanulok and Kamphaeng Phet provinces in which PTTEP and PTTEPS hold 100-per-cent participating interest, with average sales last year of about 27,351 barrels per day of crude oil, about 264 tonnes per day of liquefied petroleum gas (LPG), and about 21 million standard cubic feet per day of natural gas.
The temporary suspension of S1 operations in areas under the Agricultural Land Reform will lead to a decrease in crude-oil sales of about 15,000bpd, LPG of about 130 tonnes per day and natural gas of about 10 million standard cubic feet per day.
However, the DMF is in the process of assessing the impact in order to contemplate a mitigation plan.