Clarification on temporary suspension of S1 operations in areas of the Agricultural Land Reform
5 June 2017
Tel. 0-2537-5919, 0-2537-5304, 0-2537-5779, 0-2537-4446
5 June 2017
The Stock Exchange of Thailand
93 Ratchadaphisek Road, Dindaeng
Subject: Clarification on temporary suspension of S1 operations in areas of the Agricultural Land Reform
On 1 June 2017, the Supreme Administrative Court of Thailand revoked the Agricultural Land Reform Committee’s order to allow the use of natural resources in areas of land reform for any purposes other than agriculture. As a result, the Department of Mineral Fuels of the Ministry of Energy (DMF) has instructed all the onshore concessionaires to temporarily cease petroleum operations located in the areas of the Agricultural Land Reform.
PTTEP Siam Limited (PTTEPS), a subsidiary with 100% shares directly and indirectly held by PTT Exploration and Production Public Company Limited (PTTEP) and the operator of the S1 Project, has therefore temporarily ceased all operations in particular in the land reform areas in the S1 Project since 3 June 2017. PTTEPS carried out its operations lawfully after acquiring the project from Thai Shell Exploration & Production Company Limited (Thai-Shell) in 2004. In 1993, a Royal decree on land reforms was issued which resulted in the project area overlapping with land areas under the oversight of the Agricultural Land Reform Office (ALRO). In the year 2000, Thai-Shell, the former company holding the concession rights to the project area, submitted an application to the ALRO for permission and consent to use the land, per the ALRO’s regulatory procedures. Having acquired the project in 2004 from Thai-Shell who had received permission and consent from the ALRO to use the land, PTTEP assumed operatorship and continued to periodically submit land usage permission requests per regulatory requirements.
The S1 Project covers the area of Sukhothai, Phitsanulok and Kamphaengpet provinces in which PTTEP and PTTEPS hold 100% participating interest with the average 2016 sales volumes of crude oil of approximately 27,351 barrels per day, liquefied petroleum gas (LPG) sales volumes of approximately 264 ton per day and natural gas sales volumes of approximately 21 million standard cubic feet per day. The temporary suspension of S1 operations in areas of the Agricultural Land Reform will lead to a decrease of crude oil sales volumes of approximately 15,000 barrels per day, LPG sales volumes of approximately 130 ton per day and natural gas sales volume of approximately 10 million standard cubic feet per day. Such reduction accounts for approximately 4-5% of 2017 PTTEP’s sales volume guidance at 300,000 – 310,000 barrels of oil equivalent per day. However, DMF is in the process of assessing the impact from other onshore concessionaires in order to contemplate a mitigation plan.
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Phone : 66 (0) 2537-4000
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