Malaysia and Thailand to begin oil drilling

Malaysia and Thailand to begin oil drilling

KUALA LUMPUR (AFP): Malaysia and Thailand will in May begin joint petroleum drilling activities in an area in the Gulf of Thailand claimed by both countries, officials said yesterday.

Six exploratory wells, with investments of at least US$42 million, will be drilled this year, after more than 18 years of suspension of drilling activity in the overlapping boundaries, a Malaysia-Thailand Joint Authority (MTJA) statement said.

Exploration began in the disputed area after Malaysia and Thailand signed on April 21 last year a landmark 50-year pact to enable the MTJA to search for oil and gas in the disputed 7,250 square kilometer (4,500 square mile) area.

The pact was achieved following more than 14 years of peaceful negotiations and compromise.

The exploration was undertaken by the Thai wing of U.S.-based Triton Energy Corp., Malaysian oil corporation Petronas' exploration arm Petronas Carigali, and the Petroleum Authority of Thailand's affiliate PTT Exploration and Production.

The contractors completed the first phase of their exploration program by jointly acquiring 12,000 line-kilometers of seismic survey data covering the entire joint development area in October, MTJA officials said.

Completed

"Processing of seismic data was completed early this month and the contractors are identifying prospective subsurface geological structures and locations for their drilling campaigns," a MTJA spokesman said.

The MTJA was established in 1979 by the Malaysian and Thai governments to jointly explore and exploit natural resources in the disputed area.

Several multinational oil and gas corporations, including British Gas plc, have expressed interest in participating in the oil and gas exploration in the area.

According to industry estimates, the area could potentially yield up to seven trillion cubic feet (21 billion cubic metres) of gas.