US supermajor Chevron and Thailand’s national upstream company PTTEP have signed multiple agreements aimed at facilitating the smooth transition of operatorship of the giant producing Erawan gas condensate field offshore Thailand to PTTEP.
The two companies on 21 December signed a second site access agreement, an operations transfer agreement and an asset retirement access agreement to help ease the transfer of the Erawan asset, Chevron said.
“The agreements will foster further cooperation between both parties in relation to the transition of Erawan which will be handed over to PTTEP ED (Energy Development), the new operator of the field, in April 2022,” a statement by Chevron said.
“This set of agreements marks a major milestone in the transition process that will support both Chevron and PTTEP ED’s ongoing activities,” it noted.
Access to the Erawan asset
The agreements will enable the Thai player to “enter Erawan’s operating area to conduct production-related works ahead of PTTEP ED’s operatorship in April 2022", and “solidify cooperation between Chevron and PTTEP ED on activities in relation to the transfer of Erawan operations", the statement noted.
In addition, the newly signed deals would “enable Chevron to re-enter Erawan’s area after the concession expiry to complete ongoing decommissioning activities, consistent with the terms of the concession agreements”, Chevron said.
The two players had earlier locked horns with PTTEP stating it was unable to secure access to Erawan during the transition phase.
Chevron’s existing Erawan concession is due to expire in four months’ time and PTTEP is taking over the mature Gulf of Thailand asset under a new production sharing contract from April next year.
PTTEP had earlier said that “the installation of production facilities and other preparations are the essential parts to accomplish a production level as committed in the production sharing contract".
PTTEP’s proposed development and investment plans will enable it to produce natural gas at the required output levels of at least 800 million cubic feet per day from Erawan during the PSC.
The Thai company has been closely coordinating with both Chevron and Thailand’s Department of Mineral Fuels to ensure a smooth transition for the Gulf of Thailand asset so that new wellhead platforms and pipelines can be installed as planned.
Chatit Huayhongtong, president of Chevron Thailand Exploration and Production, said the company is “committed to the safe transition" of Erawan in April 2022.
“I am pleased the transition process continues to progress following multiple agreements with PTTEP ED to facilitate the transition, provide site access, enable inspections and share important data,” Chatit said.
Initial site agreement
The US giant said that “although Chevron is under no obligation to permit early access, the company has previously provided PTTEP ED access to the site to facilitate survey and other related work after both parties reached the first site access agreement (SAA1) in 2019".
“Since the signing, progress has been continually and safely made on activities listed under the SAA1, which are expected to be completed in January 2022,” it added.
PTTEP and its new 40% partner Mubadala Petroleum, of the United Arab Emirates, have plans for new production infrastructure including wellhead platforms and a floating storage and offloading unit for the Erawan (G1/61) project.