SET-listed PTT Exploration and Production Plc (PTTEP) has been granted two gas production renewal licences from the Mineral Fuels Department for two blocks in Udon Thani and Khon Kaen provinces.
The gas blocks -- the EU1 and E5 -- are in the Sinphuhom Plateau in the Northeast.
Premrutai Vinaiphat, the department's director-general, said the cabinet on Tuesday approved the renewal contracts for two gas blocks for 10 years. They are for exploration and production (E&P) activities.
The concession awards were granted to the subsidiary PTTEP SP Ltd to operate two onshore gas blocks.
"PTTEP SP was selected by the National Petroleum Committee, and the cabinet acknowledged and approved the committee's proposals," she said.
"The concession for the E5 block will run from March 2021 to March 2031, while the EU1 contract is renewed from June 2021 to June 2031."
Mrs Premrutai said these two concessions were decided under the rules of the Petroleum Act of 2017.
E&P operators can request contract renewals for another 10 years when their existing licences are close to expiration.
Proven gas reserves in the Sinphuhom Plateau are estimated at 114.27 billion standard cubic feet, and gas condensate in that location stood at 380,000 barrels as of 2017.
The department projects once the two renewal contracts take effect, PTTEP SP can carry on its E&P activity for gas reserves, projected to increase almost five times to 527 billion standard cubic feet.
Moreover, the Petroleum Act notes onshore petroleum blocks can run as concessions, while offshore blocks such as the Erawan and Bangkot blocks in the Gulf of Thailand must use a production-sharing contract.
PTTEP was granted licences for both the Erawan and Bangkot gas blocks.
Mrs Premrutai said the department and PTTEP are proceeding with the synchronisation of gas production in the Erawan block when the existing concession ends in 2022 and 2023 because Chevron Thailand Exploration & Production, the existing operator, will leave the gas block.
Under the production-sharing contracts for both Erawan and Bangkot gas blocks, the government will gain a combined US$979 million (30.4 billion baht), including a royalty payment of $284 million, petroleum corporate tax of $621 million and an additional bonus from the operator of $74 million.
"This renewal will enhance the country's petroleum security, particularly for power generation because natural gas from these two blocks are fed to power plants of the state-run Electricity Generating Authority of Thailand," she said.
