Thailand’s oil and gas giant PTT Exploration and Production (PTTEP) is seeking to extend its two production-sharing contracts in Myanmar, according to its chief executive Montri Rawanchaikul.
“We are not looking for expansion, we’re just looking for securing the gas needed for Thailand and Myanmar,” Montri told Reuters on the sidelines of Abu Dhabi’s flagship energy industry conference, ADIPEC.
One of the two production-sharing contracts will end in 2028 and the other one in about 20 years, he said.
PTTEP is producing gas at the Zawtika and Yadana fields in Myanmar, which combined account for about 50 percent of Myanmar’s consumption and about 20 percent of Thailand’s.
However, Myanmar people have been widely protesting against PTTEP as the revenue generated funds the country’s junta. Some human rights groups have been calling for it and other international players to exit Myanmar since the military seized power in a February 2021 coup.
Myanmar’s civilian National Unity Government (NUG) sent a formal demand letter to PTTEP in March 2023, asking it to suspend dividend payments from the Yadana offshore gas field to junta-controlled Myanma Oil and Gas Enterprise (MOGE) and deliver future payments to a NUG account.
In fiscal year 2022/23, gas sales from Yadana comprised 68 percent of the 860 million USD paid to MOGE.
PTTEP has since invited NUG representatives to Bangkok to discuss arbitration and what dividends deposited in escrow would legally entail
Energy giants TotalEnergies of France and Chevron of the United States have withdrawn from the Yadana project, citing the “worsening” human rights situation in military-ruled Myanmar. Only PTTEP and MOGE are operating in the gas field.
PTTEP, a Thai state-owned enterprise, says human rights are at the core of its business model.
“PTTEP aligns with international human rights standards and honors the cultures, traditions, values and applicable laws of all countries where we operate, including the Republic of the Union of Myanmar,” its human rights statement reads. However, it also admitted that before the coup in Myanmar it had outsourced human rights due diligence—investigations and evaluation—to unnamed “independent human rights specialists.”
Thailand is facing dwindling gas production at its Erawan field in the Gulf of Thailand, which PTTEP took over from Chevron after the latter operated it for 40 years.
According to a Reuters report, the field, which in 2019 produced 1,200 million standard cubic feet per day (mmscfd) of gas, produced between 250-300 mmscfd at handover, following delays in the transfer. It reached about 400 mmscfd in mid-2023, and PTTEP aims for it to hit 800 mmscfd in output by April next year.
In Myanmar, PTTEP said it wants to extend its contracts for its two fields to maintain energy security.
Because Thailand still needs to import liquefied national gas (LNG), PTTEP has to continue exploring for new areas, said Montri.
“We have put a lot of exploration effort in Malaysia as well because we believe that we still have gas in Malaysia, and Malaysia can actually turn the gas into LNG to export,” he added.
Thailand today relies on imported LNG to meet about 40% of its demand.
PTTEP also bid for two of three blocks on offer in the Gulf of Thailand and expects to produce gas from them in two years, according to reports. Cambodian media reports say that the Thai and Cambodian governments have resumed talks on exploration and production in their overlapping claims area
PTTEP is vying to be the major exploration and eventual production player in the overlapping claims area, which is adjacent gas fields operated by PTTEP, industry sources say.
