Unocal plans crude oil development in the Gulf of Thailand
Bangkok, Thailand, Oct. 19, 2000 -- In a move to help Thailand cut its oil imports, Unocal Thailand has submitted an application for commercial crude oil development by the company for the first time in the Gulf of Thailand.
After successfully exploring for petroleum in concession blocks 10 and 11, north of the Erawan gas field in the Gulf of Thailand, and discovering evidence of an economic volume of crude oil, the company has decided to proceed with the development of these oil and gas deposits.
Earlier this year, Unocal drilled seven successful wells in these prospects, four in Yala and three in Plamuk. The wells encountered an average of 200 feet of hydrocarbon-bearing pay. Six drill-stem tests in five of the wells averaged 1,050 barrels of oil per day.
"We are very pleased to announce this commercial development plan for the crude oil. We are doing everything we can to help Thailand lessen its dependence on imported crude," said Randy Howard, vice president for International Energy Operations.
Unocal recently applied for a production area for Yala and northern Kaphong fields. Once the Petroleum Committee approves the production area and with the endorsement of the Minister of Industry, the company expects to be ready to produce around 15,000 barrels per day of oil within 8-10 months from the Plamuk, Yala, and Surat fields. This would add one-fourth to Thailand's current total indigenous crude oil production. The government derives income from petroleum royalty (12.5%) and petroleum income tax from the sale of the crude oil by the concessionaires.
The crude oil was found existing with natural gas and condensate in these fields. The crude oil production would be the first in the Gulf of Thailand by Unocal, which has produced natural gas and condensate since 1981.
Unocal plans to install a new oil-processing platform adjacent to its existing gas-processing facilities, as well as a crude oil storage tanker. For the entire project, ten platforms will be installed. The cost of developing these oil fields is expected to be about $270 million over the next six years.
Operating on behalf of the concessionaires comprising Mitsui Oil Exploration Co., Ltd., and PTT Exploration and Production Public Company Limited, Unocal Thailand explores and produces natural gas and condensate from 13 fields in the Gulf of Thailand. Gross daily production from the fields is currently about 1.1 billion cubic feet of gas (Unocal, net 670 mmcfd). The natural gas produced powers generating plants that supply about 30 percent of Thailand's total electricity demand. Of the natural gas produced, more than 75 percent is used to generate electricity. The remainder is used for industrial fuel, transportation fuel, cooking gas, and petrochemical feedstock.
This news release contains certain forward-looking statements about Unocal's production rates, capital expenditures and drilling plans. These statements are not guarantees of future performance. The statements are based upon Unocal's current expectations and beliefs and are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those described in the forward looking statements. Actual results could differ materially as a result of factors discussed in Unocal's 1999 Form 10-K report filed with the Securities and Exchange Commission. Unocal undertakes no obligation to update the information in this news release.
U.S. investors are urged to consider closely the disclosure in Unocal's 1999 Form 10-K.Copies of the company's SEC filings are available from the company by calling 800-252-2233. The reports are also available on the Unocal web site, www.unocal.com.
Updated: October 2000