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<Picture: * >The US oil firm Texaco will spend more than 300 million 
baht over the next three years in an exploration programme to prove gas 
deposits in the block B11/38, covering an area of 8,690 sq km, in the 
southern part of the Gulf.

Texaco is enthusiastic about the gas prospects in the newly-acquired 
tract because of its proximity to Unocal Thailand's Pailin gas field. 
Pailin is due to come on stream in late 1999 or early 2000.

Block 11/38 extends the prospective concession area of Texaco in the 
Gulf beyond 11/32, the other prospective acreage (7,146 sq km) which it 
was awarded in 1991.

Both blocks are situated over the southern portion of the Pattani Basin, 
a geological structure that currently is producing commercial quantity 
oil and gas from its northern sections.

According to Texaco, the company is committed to acquire at least 1,000 
line kms of 2-D seismic survey and to drilling two wells in block B11/38 
over the next three years. However, the firm is likely to exceed the 
work commitment.

<Picture: * >The group led by Cairn Energy Plc, the independent UK oil 
firm, will spend "millions of dollars" on its new Thai concession 
acreage 5643/38, covering an area of 2,940 sq km in Udon Thani, where 
the Si That gas structure was discovered by Esso Exploration about a 
decade ago but has not been put into production.

Along with its co-venturers, Cairn put its two small oil discovery wells 
in the Phetchabun block SW1 on production late in 1996. The two wells 
are Na Sanun and Si That and both are expected to yield some 500 barrels 
per day (b/d) of oil production, supplementing about 300 b/d crude being 
produced by the first well Wichian Buri-1.

Enthusiastic about the prospects in the new Thai onshore block, Cairn 
plans to advance the exploration activities ahead of the terms contained 
in the concession licence.

Under the terms, Cairn is obliged to engage in the re-interpretation of 
seismic data previously carried out over the area during the first year 
of obligation, shooting more seismic survey in the second year and 
drilling one exploratory well in the third year.

However, Cairn intends to expedite the exploration programme and bring 
forward the drilling programme to the first year with the drilling of 
one or two wells next year, said Ian Halstead, manager of Cairn Energy 
Thailand.

In the subsequent three-year obligation period, Cairn is committed to 
drill three exploratory wells in its wholly-owned Udon Thani tract.

Andaman search commences

Meanwhile in November, the quest for petroleum in Andaman Sea resumed 
after more than a decade with Unocal Bangkok kicking off a 1.2 billion 
baht exploration programme.

The six-year plan commenced with a seismic geophysical survey on blocks 
W8/38 and W9/38, covering a total area of 48,000 square kilometres, some 
100-250 km off the southwestern coast of Phuket.

The Geco Echo vessel started the campaign with 10,000 line km of seismic 
work, to be followed by interpretation.

Unocal first discovered natural gas in the area during the exploration 
work undertaken in the 1970s, but relinquished the concession due to a 
limited domestic gas market at the time.

"Deep water exploration in the Andaman Sea is a real challenge, but with 
modern exploration technology, we believe that success lies within 
reach," said Brian Marcotte, president of Unocal's Thai units.

Unocal plans to drill two explorations in the blocks in late 1997.

The concession blocks are owned by Unocal (46.66%), Total Khorat, part 
of French oil firm Total (33.33%), and Statoil Siam, a branch of 
Norwegian state oil firm Statoil (20%).

The tracts were awarded to the group in June 1996 as part of the 
Industry Ministry's 14th petroleum concession bidding round.

Unocal scores high

US energy firm Unocal has chalked up a marked success in its quest for 
new gas reserves in the Gulf of Thailand - all of 11 exploration wells 
drilled earlier in 1996 are commercial gas wells and in the process a 
new gas field was discovered.

The successful exploration pro gramme has enabled Unocal Thailand to 
confirm extensions to the Satun, Platong and Baanpot fields, which are 
already producing gas and condensate. In addition, these wells proved 
the commercial viability of Pladang and Trat fields.

Unocal Thailand vice president for exploration Gregor Dixon said the 
wells are expected to increase Unocal's gas reserves in the Gulf by more 
than 300 billion cubic feet (Bcf).

According to Mr Dixon, Unocal had also discovered a new field named 
Plamuk (squid, in Thai). Further work on Plamuk is planned in 1997 to 
confirm its size and development schedule.

The high success rate supports Unocal Thailand's plan to increase 
production rates in the present gas contract areas from which gas is 
produced and sold to PTT, the natural gas distribution monopoly.

Unocal Thailand expected its gas production to average 990 MMcfd during 
the fourth quarter of 1996. At the time of writing, Unocal had averaged 
750 MMcfd of natural gas and 27,500 b/d of condensate. On November 3, it 
achieved an all-time record gas production rate of 1,006 MMcfd.

The 11 successful wells averaged more than 200 ft of natural gas and 
condensate "pay zones", 50 ft more than the average for Unocal's 
exploration wells drilled to date in the Gulf.

Using slim-hole drilling technology, Unocal spent only eight days on the 
average drilling, logging and testing the wells at a cost of under 
$900,000 (22.5 million baht) a well. "Our ability to drill such low-cost 
wells has enabled us to take a larger number of prudent risks," said Mr 
Dixon.

Unocal Thailand operates four different gas contract areas, covering 
nine currently producing gas-condensate fields. Its co-venturers consist 
of Mitsui Oil Exploration, MOECO Thai Oil Development, PTT Exploration & 
Production Plc, and Amerada Hess International Exploration.


<Picture: [Yadans gas pipeline route>


Accord on Nam Pong gas near

Esso appeared close to concluding an accord to nearly double the sales 
volume of natural gas from its Nam Phong gas field in northeastern 
Thailand to PTT.

Following some four years of protracted negotiations, executives of Esso 
Exploration Khorat Inc said it was likely the agreement to raise the gas 
delivery from the current maximum contractual rate of 75 million cubic 
feet per day (MMcfd) to 125 MMcfd would be finalised soon.

A senior Esso executive said the expected conclusion of the negotiations 
came as a result of "greater recognition" of the sticky price issue by 
PTT and the Department of Mineral Resources (DMR), which supervises 
Esso's Nam Phong gas development activities in Khon Kaen.

The issue involves the DMR because there are terms linking the 
development with the concession regime imposed on hydrocarbons 
prospectors and producers.

There has also been a stronger desire by the Electricity Generating 
Authority of Thailand (Egat), the sole Nam Phong gas user, to consume 
more gas for its combined cycle plant, about 3 km from the onshore gas 
field, in the light of the steep increase in power demand in the region.

Through PTT, Esso has delivered 65 MMcfd of Nam Phong gas to the Egat 
power station. That rate meets only half of the 700-MW power plant's 
demand.

The incremental gas delivery will link the supplementary gas sale 
agreement to the main gas sale pact for Nam Phong which came into 
production in December 1990.

The well-head price of the supplementary gas under negotiation is not 
known but industry sources said it would be higher than what PTT has 
been paying Esso for the current gas, now in the range of US$2 per 
million BTU.

Development of the Nam Phong field expansion phase is expected to take 
one year with the increased gas delivery hoped to begin in 1998, 
according to Esso executives.

In the last quarter of 1996, Esso resumed drilling in northeastern 
Thailand after stopping in 1991. The US oil firm is now drilling an 
additional well in the Nam Phong structure in a bid to add new gas 
production to augment the field's gas output resulting from the drop in 
reservoir pressure in some wells.

Drilling of the new well, Nam Phong-7, by Deutag rig has begun and is 
expected to be complete in 100-days' time and later tied in with the Nam 
Phong processing facilities and the pipeline system linked with Egat's 
power plant.

The well, drilled directionally, is likely to yield 15-20 MMcfd of gas 
production, At present, there are five wells in production at Nam Phong.

Esso has recorded a good performance with the Nam Phong reservoir in the 
past six years of production. However, the company does not expect to 
revise the recovery gas reserves from 0.4 Tcf certified years ago, 
though it believes the gas deliverability of the field can be increased 
if more wells are drilled.

The company anticipates Nam Phong gas field to sustain gas production 
over the next 20 years.

PTT completes 'parallel' line

Petroleum Authority of Thailand (PTT) has announced the full completion 
of its second gas trunk line removing the bottleneck that hindered 
offshore supplies to meet the Kingdom's energy need.

The so-called "parallel" line, built at a cost of 22.85 billion baht, 
will allow PTT to double offshore gas delivery from the 800-odd MMcfd 
through the first trunk line laid in the Gulf of Thailand, which has 
been in operation since 1981, according to PTT Gas president Piti 
Yimprasert.

The new gas line will support PTT's plans to boost gas offtake from 
producers in the Gulf; the Unocal-operated gas fields from 800 to 1,000 
MMcfd, Total-operated Bongkot gas field now yielding 350 MMcfd; and the 
gas fields in the Joint Development Area (JDA) on the Malay-Thai 
continental shelf, which are expected to begin delivering 250 MMcfd in 
the year 2000.

Completion of PTT's parallel pipeline was marked by the November 
finishing of the last stage - the laying of the 36-inch 100-km line from 
the Electricity Generating Authority of Thailand's Bang Pakong power 
house in Chachoengsao to its Wang Noi power plant in Ayutthaya.

Last April, the state gas distribution monopoly completed laying the 
first two stages of the new gas grid and has since put them into 
service.

The first stage, involving an offshore pipeline, 36 inches in diameter 
and 425 km in length, was laid parallel to PTT's first trunk line which 
stretches from Unocal's Erawan field in the central Gulf to Rayong on 
the Eastern Seaboard.

The second stage is an onshore line, 28 inches in diameter and 110 km 
long, stretching from Rayong to Bang Pakong power house. PTT began 
putting natural gas through the Bang Pakong-Wang Noi line in November.

As part of the project, gas compression facilities have been installed 
both offshore and onshore in the event that gas delivery exceeds the 
normal rate of 500 MMcfd for the offshore line and 340 MMcfd for the 
onshore stretch.

Natuna gas push

Thailand and Indonesia have expressed mutual interest in cutting a deal 
on the sale of natural gas from Indonesia's Natuna gas field in the 
South China Sea.

Indonesian Research and Technology Minister Bacharudin Jusuf Habibie was 
quoted as saying as saying "a memorandum of agreement" for the gas sale 
was signed. But a senior official with the Petroleum Authority of 
Thailand (PTT), the negotiating party, denied a document had been 
signed.

"We have not agreed to buy (Natuna gas) and no purchase memorandum was 
signed. We are still at the negotiation stage whereby the parties 
involved including Esso (the production sharing contractor) have 
expressed an interest to make a deal," said the PTT official.

Natuna is one of the possible sources of natural gas supplies which the 
Thai state oil company has been exploring to meet the Kingdom's 
insatiable energy demand in the coming decade.

In particular, Thai energy planners are weighing the economic 
proposition of piping Natuna gas to Thailand against the import of LNG 
from Qatar and Oman.

Mr Habibie, who also heads the authority developing the huge gas field, 
was quoted by Media Indonesia daily as saying the gas would be delivered 
to Thailand through a 909 km pipeline which runs through Malaysia.

The proposed line would stretch from Natuna to Rayong on the Thai 
Eastern Seaboard. The pipeline would also go through Sumatra Island and 
feed gas to the Arun LNG plant in Aceh, northern Sumatra.

Mr Habibie suggested that Natuna contains some 222 trillion cubic feet 
of gas. The gas from the Natuna has a carbon dioxide content of up to 
71.9%, making processing costs higher than for gas from Indonesia's two 
other major fields, Arun in Aceh and Bontang in East Kalimantan.

The deputy executive chief of the Natuna project, Sulaiman Wiriadijaya, 
has said he expects the first gas delivery from Natuna to be in the year 
2002.

Indonesia is trying to market the Natuna gas to other countries in 
Southeast Asia, including Vietnam and even southern China. Mr Habibie 
said the carbon dioxide might be liquefied and sent to the proposed 
plant in Mamberano, Irian Jaya for processing into synthetic gas, 
methane and ethane.

Indonesian state oil firm Pertamina and Esso Natuna Inc, a subsidiary of 
Exxon, in January 1995 signed an agreement to develop Natuna, an 
exercise which is estimated to cost $40 billion including a 15 million 
tons/year gas liquefaction facility.

Bongkot enters new development

The Thai-European concessionaire group led by France's Total will inject 
an additional US$270 million (6.75 billion baht) in capital for the next 
phase of its offshore Bongkot gas field now being launched to raise the 
field's gas production capacity by 57.5%.

The expenditure programme for phase IIIa will raise the total investment 
of the consortium for the Bongkot gas development project in the Gulf of 
Thailand to $945 million (23.625 billion baht). The group has spent $675 
million (16.875 billion baht) for the phase I and II schemes which were 
completed in 1993 and 1995, respectively.

Executives with Total Exploration & Production Thailand, the operator of 
Bongkot, said the new investment will mainly go towards installing two 
additional well-head platforms, drilling 48 new wells and installing new 
processing equipment on the existing production complex, including a 
third gas train, an additional gas-liquid separator and the relevant 
utilities.

The phase IIIa development, to be completed in two years' time, forms 
the initial part of the greater phase III scheme which calls for 
installing 12 new well-head platforms and the drilling of about 110 
wells.

The focus of the greater phase III plan is on the main Bongkot, about 
640 km south of Bangkok, and its satellite field Ton Sak. This entire 
development is expected to take 10 years.

According to Total, phase III project is aimed at increasing Bongkot's 
production capacity from 400 MMcfd of gas to 630 MMcfd and condensate 
from 10,000 b/d to 13,000 b/d.

That will allow the consortium to meet the new contractual gas delivery 
of 550 MMcfd to PTT as of mid-1998.

In implementing the phase III development project, the Total 
concessionaire has awarded a contract to Nippon Steel to supply two 
well-head platforms and the associated sea-lines.




JDA gas set to go Thailand

<Picture: [Unocal gas fields Gulf of Thailand map>

As more and more gas discoveries have been reported on the Malay-Thai 
continental shelf in 1996, it is certain the entire natural gas 
production from the first two gas fields lying on the shelf will be sold 
and piped to energy-hungry Thailand.

This is part of the understanding established by parties concerned in 
the negotiations on the long-term sale of natural gas from Cakerawala, 
the first of the gas fields located in the Malaysia-Thailand Joint 
Develop ment Area (JDA), which is expected to come on stream in 1999.

This understanding will also apply to the second gas field in JDA, Muda, 
tentatively to come on stream in the year 2000, according to a senior 
official with the Malaysia-Thailand Joint Authority (MTJA). MTJA is a 
two-government statutory body vested with the rights to exploit 
petroleum resources on the 7,250 sq km JDA in the South China Sea.

The understanding is based on the fact that Thailand has more natural 
gas demand than Malaysia, whose indigenous gas supplies are more than 
sufficient to meet its domestic use.

Last May, PTT and Petronas signed a basic accord to purchase JDA gas 
from MTJA and its production sharing contractors. But PTT has decided to 
opt for buying the initial gas production from the once-disputed 
territorial claims.

Negotiations on the contract for the sale of natural gas from Cakerawala 
field to PTT began in earnest during 1996 with MTJA and its production 
sharing contractors, the consortium of US-based Triton Energy and 
Malaysia's Petronas Carigali, which operates block A-18 in which 
Cakerawala is situated.

Some headway was made in the talks for the Cakerawala gas sales which 
will be made on the well-head price basis with PTT responsible for 
laying the pipeline to transport the gas to Thailand.

MTJA and its production sharing contractors, which also include PTT 
Exploration & Production Plc (PTTEP), an exploration arm of the Thai 
state oil firm PTT, are confident the two first gas fields in JDA - 
Cakerawala and Muda - can "comfortably" assure up to 500 MMcfd of gas 
delivery to Thailand.

Cakerawala field, lying about 260 km east of the southern Thai province 
of Songkhla and 140 km northeast of Kota Bharu, is most likely to 
sustain an initial gas flow of some 300 MMcfd for up to 20-25 years, 
they said.

Muda, located in the upper block B-17 and operated by the alliance of 
PTTEP and Petronas Carigali (part of Petronas), can initially deliver 
200-250 MMcfd of gas starting in 2000 with a speedy development scheme.

In the meantime, PTT is considering the suitable routing of the pipeline 
which will transport the Cakerawala and Muda gas to Thailand, connecting 
with PTT's on/offshore grid.

The plan to move Cakerawala and Muda into the production stage results 
from the intensive exploration programme conducted over the past two 
years on blocks A-18 and B-17 where 10 wells have been drilled at a cost 
estimated at more than $120 million (3 billion baht).

The exploration efforts over the two blocks have been relatively 
successful with at least six good gas structures being discovered. Aside 
from Cakerawala and Muda, there are fields known as Bulan, Suriya, Bumi 
and Tapi.

Unocal's dominant role continues

During 1996, the US energy concern Unocal Corp announced a major plan 
that sees the continuation of its role as the biggest indigenous natural 
gas producer for Thailand for at least another 20 years.

Although its dominance will be curtailed somewhat by other gas 
suppliers, its objective for a major and long-term presence in the Thai 
energy scene is reflected by the substantial investment it is making 
here.

Through its local unit Unocal Thailand, the company looks set to invest 
billions of dollars in coming decades to sustain its high level of gas 
exploration and development activities in the Kingdom.

During the 1996-2000 period alone, Unocal Thailand and its co-venturers 
plan to spend more than $1.38 billion (34.5 billion baht) developing gas 
fields, particularly in the Gulf of Thailand.

The planned budget will top up the $4.2 billion (105 billion baht) the 
group has poured into the Thai operations since Unocal entered its first 
prospecting venture in northeastern Thailand back in 1962. Unocal has 
been the largest investor in Thailand's upstream petroleum sector.

The planned exercise is one of the largest offshore gas development 
projects in Southeast Asia and reflects Unocal's long-term investment 
commitment which enables it to capitalise on Thailand's huge natural gas 
market over at least the next two decades.

"Certainly for a very long foreseeable future, we will expect to be the 
major gas supplier for Thailand," said Unocal Thailand president Brian 
Marcotte.

Unocal Thailand currently pro duces nearly 1 billion cubic feet per day 
(Bcfd) of gas from its Gulf gas fields, which is about 70% of total Thai 
indigenous natural gas production.

But that percentage is expected to slip over the next decade to 40-50% 
as additional gas supplies, including from the Total-operated Bongkot, 
also in the Gulf, and the Malaysia-Thailand Joint Development Area (JDA) 
on the continental shelf, enter production in the next couple of years.

However, Unocal expects its Gulf gas production to be at or above 1 Bcf 
for the good part of the next decade, said Mr Marcotte.

The 1996-2000 programme calls for the drilling of 489 development wells, 
21 "tie back" wells, 52 appraisal and delineation wells, installing 38 
well-head platforms and laying 153 miles of pipeline.

The programme will enable the concessionaire to meet the target of 
raising its natural gas delivery to PTT from an average of 800 million 
cubic feet per day (MMcfd) in 1996 to 1,015 MMcfd in 2000.

At the centre is the continuing development of the Pailin gas field in 
the Gulf which is expected to ultimately cost $1.2 billion (30 billion 
baht). The development is divided into two phases with the initial stage 
designed to produce a maximum 250 MMcfd of gas, though the contractual 
gas delivery to PTT is 165 MMcfd in the 1999-2000 period, before rising 
to 330 MMcfd in the year 2001.

In its quest to add more gas reserves, Unocal, together with the French 
oil firm Total and the Norwegian state oil concern Statoil, will spend 
nearly $20 million (50 million baht) over the next three years in 
exploring the newly-acquired concession areas block W8/38 and W9/38 in 
the Andaman Sea.

Unocal does not release its Thai gas reserves figures, but Mr Marcotte 
said its current figures represent about 17-20% of Unocal's global 
petroleum reserves. Cumulative gas production from Unocal 
Thailand-operated tracts since its inception in 1981 to August 1996 was 
2,659 Bcf plus 97 million bbls of condensate.

The company has had more success in its drilling with the vast majority 
of wells being drilled producing some hydrocarbons discoveries. Very few 
wells have been absolutely dry holes.

Move to curtail energy use

Plans are under way to curtail Thailand's annual energy demand growth 
rate from 13% to below 10% during the Eighth National Plan (1997-2001) 
which started in October 1996.

The measures will be geared towards more efficient consumption and 
conservation of energy, whose demand in Thailand has been growing by a 
big margin over the past 30 years, and reducing the environmental impact 
created by the use of energy, said National Energy Policy Office (Nepo) 
secretary general Piyasvasti Amranand.

Among key measures being adopted by Nepo and other agencies are the 
restructuring of the price of several oil products to reflect their 
economic cost and marketing forces without political intervention, while 
narrowing down the gap in oil prices in Bangkok and the provinces.

Further adjustment to the electricity tariff, both on the retail and 
wholesale levels, to reflect realistically the economic cost of 
production as well as reviewing the automatic power tariff adjustment 
mechanism is also part of the priority measures.

Similarly, the pricing of natural gas and its transport charge through 
the pipeline will be made more transparent and more reasonable in order 
to help reduce the cost of power generation.

Other measures are the labelling of energy efficient levels on 
electrical appliances, promoting the production of energy-efficient 
electrical appliances and a public campaign on energy conservation.

Thailand's energy consumption in the form of petroleum alone during the 
first eight months of 1996 increased 9.6% to reach an average 883,370 
b/d of oil equivalent, according to the Petroleum Authority of Thailand.


(The Nation)
Korn softens stance over Yadana gas pipeline 



The Nation 

IN a move to defuse strong opposition against the Yadana gas pipeline 
project, Deputy Prime Minister Korn Dabaransi said yesterday the 
government would modify the project. 

Korn, who is also industry minister, said the width of six-kilometre 
strip of land that would be used for the gas pipeline would be reduced 
from 20 metres to about 12 to 15 metres to minimise the number of trees 
that would have to be cut. 

To save trees that are along the route of the pipeline, Korn said the 
trees would be removed and later replanted in the area. 

The decision came after a meeting of government authorities involved in 
the project, including the Petroleum Authority of Thailand (PTT) and the 
Forestry Department. 

Agriculture Minister Chucheep Harnsawat also attended the meeting, which 
came just a day before opponents and supporters of the projects were to 
attend a meeting to be chaired by Prime Minister Chavalit Yongchaiyudh. 

The Yadana project, to connect Burma's offshore gas field in the 
Martaban gulf with a power plant in Kanchanaburi province, become 
controversial because pro-environmental groups claimed that the project 
would pass through thick forests. Added to the controversy is Burma's 
military junta, which many fear would use forced labour to construct the 
project on Burmese territory. 

Korn said that the project would begin soon. 

''Any move to clear the area for the gas pipeline will be implemented 
after the rainy season," Korn said. He was confident that yesterday's 
decision would not affect contracts between the PTT and Burma. 

Korn said the PTT would accept any expense incurred due to changes to 
the plan. 

Referring to the meeting scheduled for today, Korn said it would be an 
opportunity for supporters and detractors of the pipeline to examine the 
available information and discuss the possible adverse effects the 
project might have on villagers and the environment. 

Meanwhile, a pro-environment group, the so-called Anurak Muangkarn, 
submitted a letter to the House Committee on the environment yesterday, 
opposing the Yadana project. 

The group said that the project would badly affect local people and the 
environment. 

Committee member Ong-art Klampaiboon, who received the letter, told 
reporters later that the committee would invite Korn, the PTT governor 
and the Forestry Department's director general to explain the issue 
before the committee.

Suspected Thai drug kingpin charged in New York



posted at 15:30 hrs (Bangkok time) 



NEW YORK, June 9 -- A Thai national suspected of being behind the 
largest heroin shipment ever seized by US authorities was formally 
charged here Monday in federal court, court officials said. 

Pongsak Rojanasakul -- who was extradited from Thailand June 5 -- is 
accused of trying to bring 486 kilogrammes (1,069 pounds) of heroin into 
the United States. The drugs were confiscated in 1991 in California. 

Pongsak, 44, pleaded not guilty. He was jailed without bail by a federal 
court in Brooklyn. No trial date was set. 

Four people -- including Pongsak's brother -- were sentenced in the wake 
of the attempted drug smuggling. 

On May 17 Pongsak was dramatically returned to Thailand by Burma where 
he had fled after jumping bail here earlier this year. 

Extradition proceedings were also under way for alleged Pongsak 
accomplice Cha Chung-chan, who was being held in a Thai jail. (AFP)





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