(Asia-Pacific) - Thailand's PTTEP Exploration and Production Public Co. Ltd. expects an increase in operating expenses this year, mainly due to the cost of the Nang Nuan project, where a technical problem had delayed commercial production by three months.
The field in the Gulf of Thailand will start production end of 2Q 2006, says PTTEP.
PTTEP said it was also expecting an increase in the cost of the B8/32 & 9A project and in the maintenance cost of the Bongkot and Pailin projects in the Gulf of Thailand.
PTTEP is prepared for increases in exploration expenses due to the write-off of dry wells in the Algeria 433a & 416b, the S1, the Yetagun, and the Unocal III projects.
The increase in expenses is also due to the rise in cost of the geological study and 3D seismic survey of the Pailin, the Malaysia Thailand Joint Development Area (MTJDA), the Algeria 433a & 416b and the L53/43 & L54/43 projects.
PTTEP has projected better prospects and less volatility of oil prices in 2006, along with global economic growth, particularly the continuous economic growth in Asia.
Nevertheless, PTTEP said it has to closely monitor the economic situations in the competitive petroleum business as all companies are accelerating the development of their petroleum resources in response to the upward trends of oil prices.
It said higher demand from development facilities for material and rigs could lead to shortage of fundamental requirements for development facilities.
PTTEP and its subsidiaries in 2005 expanded E&P business in Thailand and overseas, including block B in Cambodia, Saveh block in Iran, block B8/32 & 9A in Gulf of Thailand, Merangin I in Indonesia, and block M11 in Myanmar.
PTTEP established PTTEP Iran Co. Ltd. to carry out petroleum exploration and development in Iran, and Diamond Petroleum Co. Ltd. to carry out petroleum exploration and development activities in Thailand.
It has signed gas sales agreements during the year to support the development of the Oman 44,, MTJDA, and Phu Horm projects.
PTTEP said its unaudited 2005 revenue rose by 44% to $1.8 billion.
As of Dec. 31, 2005, PTTEP had 950 MMboe, comprised of 151 MMbbl of crude oil and condensate, and 5,158 bcf of natural gas.
Its 2005 sales volume averaged 153,531 boe/d of oil compared with 144,000 boe/d in 2004.