Thailand’s national upstream company PTTEP has set its sights on potentially taking over operatorship of and a larger stake in the giant producing Yadana gas field offshore Myanmar when existing operator TotalEnergies departs later this year.

“PTTEP is carefully considering potential directions of the Yadana project and MGTC whereby putting the utmost importance for the energy security of Thailand and Myanmar and preventing impacts on energy demand to the livelihood of people in both countries,” a company spokesperson told Upstream.

French supermajor TotalEnergies last month confirmed it was withdrawing from its operated position in Yadana and from the Moattama Gas Transportation Company (MGTC), which transports gas from Yadana, in light of the deteriorating security situation following the February 2021 military coup.

US supermajor Chevron is too pulling out of Myanmar's upstream sector, and its minority stakes in Yadana and MGTC will also be available to PTTEP.

The Yadana and MGTC consortium currently comprises operator TotalEnergies with a 31.2375% participating interest, Unocal Myanmar Offshore Company (Chevron) on 28.2625%, PTTEP having 25.5% and state-owned Myanma Oil and Gas Enterprise (MOGE) with 15%.

The Thai company has said “they’re willing to take over all shares of Total [sic] and Chevron, but we’re not sure whether or not we should allow it to acquire all these shares”, Zaw Min Tun, lead spokesman for Myanmar’s State Administration Council – the military junta - told Bloomberg.

Several local companies are said to also be keen to come onboard Yadana and discussions have begun between the government, PTTEP and prospective co-venturers.

“We expect to reach a concrete decision within this month,” added Zaw Min Tun, saying that PTT executives had arrived in Myanmar to discuss the company’s proposal with Ministry of Electricity and Energy officials.

Gas produced at Yadana provides key feedstock for power generation in both Myanmar and in western Thailand, to where it flows via offshore and onshore pipeline infrastructure. The Yadana partners in 2021 completed two scheduled production wells on Yadana and the satellite Badamyar field to maintain volumes and ensure gas delivery as per the long-term gas sales agreement.

TotalEnergies' withdrawal from Yadana and the MGTC are expected to be finalised within 180 days of official approval, noted PTTEP.

Block M-3

Meanwhile, PTTEP is hoping to progress with its exploration and development plans for Block M-3 exploration project offshore Myanmar, for which it is currently waiting for production sharing contract supplementary approval from the Myanmar government.

Sole Block M-3 partner, Japan’s Mitsui Oil Exploration Company (Moeco), last September notified PTTEP of its intention to give up its 20% stake, leaving the Thai company with 100% operated equity. Completion of this transaction is subject to Myanmar government approval.

However, the proposed domestic power project to exploit M-3’s discovered gas reserves has been facing delays as a result of the local political situation and Covid-19 outbreak.

PTTEP noted it “is still closely monitoring the situations to assess risks as well as to prepare for an appropriate action plan”.

Zawtika and Yetagun

The Thai player also operates the producing Zawtika gas field offshore Myanmar and is a partner in Petronas’ Yetagun producing gas condensate asset in the Southeast Asian nation.

Last year, the Zawtika field was able to produce gas and meet its sales obligations for both the domestic market and pipeline export to Thailand.

However, PTTEP last week admitted that the coronavirus pandemic and turbulent situation in Myanmar have caused some delays to certain activities at this asset.

The company said it has monitored the situation closely, identified potential risks, and prepared asset readiness following the Business Continuity Management plan to ensure the uninterrupted supply of hydrocarbons.

PTTEP too has been progressing with Phase 1D of the Zawtika project, which will see new wellhead platforms installed at the field to maintain output levels.

Petronas last October resumed production at its Yetagun offshore field, which had been shut in earlier during the Covid-19 pandemic.

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