PTTEP Seeking to Expand Upstream Portfolio in Southeast Asia

Malaysia will remain a key destination for Thailand’s national oil company, PTT Exploration and Production Public Company Ltd’s (PTTEP) investments in both the short and long term, said BMI, a Fitch Solutions company. 

The market research firm said PTTEP holds considerable assets in Malaysia and seeks to strengthen its exploration and production activities in the neighbouring country while pursuing additional natural gas assets. 

PTTEP is expected to announce the final investment decision (FID) for the Lang Lebah gas field development located in the SK410B block, 90km off the coast of Miri, Sarawak in 2024. 

“First gas from the project is anticipated in 2027,” it said in a statement. 

BMI said the outlook for PTTEP’s oil and gas investments in Southeast Asia is expected to continue rising before the end of the decade, as the company has already committed to further investments in neighbouring Malaysia, Myanmar and Vietnam. 

PTTEP, which holds a 42.5% interest through its subsidiary PTTEP HK Offshore, alongside KUFPEC Malaysia (42.5%) and Petronas (15%), has completed the front-end engineering design, which includes a carbon capture and storage project. 

Natural gas recovered from the Lang Lebah project is intended to supply the Bintulu liquefied natural gas (LNG) project and other industries in Sarawak state and is expected to produce 3.3bcm/y of natural gas at its peak. 

“PTTEP will likely proceed with the Lang Lebah project because it complements its LNG investments in Malaysia and long-term natural gas supply strategy,” BMI said. 

In 2017, PTTGL Investment Ltd (PTTGLI), a joint venture between PTTEP and PTT Public Company Ltd, acquired a 10% equity interest in Petronas LNG 9 Sdn Bhd (PL9SB), which operates a 3.6 mtpa train at the Bintulu LNG complex. 

“PTTEP is still conducting exploration activities in various blocks, including SK410B (LLB/Paprika-1), SK417, SK314A, SK438, SK405B, PM415, and PM407,” it said. 

BMI said future investments in Malaysia would largely depend on commercially viable oil and gas discoveries. 

The Malaysia-Thailand Joint Development Area (MTJDA) is another joint-venture project that PTTEP has committed to invest in. 

PTTEP and Petronas have received approval from the Malaysian and Thai governments to extend the production period for another 10 years until 2039. 

PTTEP and Petronas aim to increase gas production from the MTJDA by 0.52 billion cubic metres from the A-17 and A-18 blocks. 

 

Southeast Asia’s national oil companies to lead oil and gas capex growth 

BMI has forecasted that the capital expenditures (capex) planned by the 15 key Asian oil and gas companies it monitors will reach US$136.4 billion (RM603.63 billion) in 2024, projecting a moderate increase of 4.8% over the levels observed in 2023. 

It added that Petronas’ capex was estimated to have increased by 5.4% year-on-year to US$11.57 billion (RM51.19 billion) in 2023 from the previous year, and capex requirements for both domestic and international operations increased in 2023. 

BMI said investments in overseas operations are expected to increase further in 2024 since Petronas and its partners, including TotalEnergies’ EP Angola Block 20 and Sonangol Pesquisa e Produção SA have reached the FID to develop the Cameia and Golfinho fields in Block 20/11 located offshore Angola. Petronas holds a 40% interest in the project. 

“Exploration capex in Indonesia is expected to rise in 2024 since Petronas’ subsidiary, Petronas E&P Bobara Sdn Bhd, signed a production-sharing contract for the Bobara Working Area located offshore West Papua, Indonesia, in May 2024,” it said, adding that Petronas E&P Bobara operates and holds a 100% stake in the Bobara Working Area. 

BMI stated that Malaysia is expected to see a steady increase in upstream exploration expenditures in 2024 and beyond since the government has launched successive rounds of petroleum bidding since 2021. 

“Foreign companies are also expected to maintain a higher level of exploration expenditures following oil and gas discoveries in 2023,” it added. 

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