KEY POINTS
- Chevron is revisiting the stalled Ubon gas condensate field offshore Thailand.
- The company believes a commercially viable development plan may now be possible.
- Further technical and economic assessment is needed before a final investment decision.
Chevron is making another attempt to develop the long-stalled Ubon gas condensate field offshore Thailand, years after previous efforts failed to move the project into development.
The Ubon field has remained on the sidelines despite Chevron’s continued interest, with the US energy major now believing it may be possible to create a commercially viable development plan.
The renewed focus comes as Chevron Thailand Exploration and Production, led by president Chatit Huayhongtong, reassesses opportunities within Thailand’s offshore oil and gas sector.
Ubon has been the subject of several development efforts, but previous attempts were unsuccessful in getting the project to a final investment and construction stage.
The latest move signals that Chevron is prepared to revisit the technical and commercial assumptions surrounding the field. The company is understood to be examining whether changes in development concepts, costs, infrastructure or market conditions could improve the project’s economics.
A successful development would allow Chevron to bring additional domestic gas and condensate supplies into Thailand’s energy system.
The field’s gas resources could be particularly relevant to Thailand as the country seeks to maintain reliable supplies for power generation and industrial users while managing the decline of some mature domestic fields.
Commercial viability remains key
Chevron’s renewed interest does not mean that the Ubon project has reached a final investment decision. The immediate focus is on determining whether a development can generate sufficient commercial returns.
Offshore gas projects require substantial upfront spending on wells, subsea infrastructure, processing facilities and supporting infrastructure. Any development plan therefore has to balance the size and quality of the resource against capital costs, expected production rates and gas prices.
The reassessment could also involve finding a development concept that is simpler or more cost-effective than earlier proposals.
Chevron has a long-standing presence in Thailand and operates major offshore assets in the country. Its experience and existing infrastructure could provide a potential foundation for developing additional resources if the economics can be made to work.
Bringing Ubon into production would potentially strengthen Thailand’s domestic gas supply and help reduce pressure on imported gas.
Thailand relies heavily on natural gas for electricity generation and industrial activity, making the continued development of domestic resources an important part of its energy strategy.
For Chevron, the project would also offer an opportunity to extract additional value from an offshore resource that has remained undeveloped for years.
The renewed assessment will therefore be closely watched by Thailand’s energy sector. However, further technical and commercial work will be needed before the project can progress from a renewed concept to a fully sanctioned development.
