Gulf of Thailand oil field revamp gets green light

Canada-based oil and gas company Valeura Energy has taken a final investment decision (FID) on the development of its 100%-owned field offshore the Gulf of Thailand.

The FID has allowed the Canadian player to go through with the redevelopment of the Wassana field in license G10/48 off Thailand. The full block potential is envisaged to be optimized thanks to the addition of a newbuild central processing platform (CPP).

Valeura hopes the updates will extend the end-of-field life (EOFL) by 16 years, to 2043. The first oil from the new facility is expected in Q2 2027, with peak field production targeting 10,000 barrels per day, which is more than 2.7 times the current output from the field.

Sean Guest, Valeura’s President and CEO, said: “This project is very robust and resilient from an economic standpoint. Even in a lower oil price environment of US$60 per barrel, the development delivers returns of approximately 40% IRR. This economic strength provides downside protection while maintaining upside potential as oil prices strengthen, creating a favourable risk-reward profile for our shareholders.

“Our financial position allows us to fully fund this development through existing cash reserves, without compromising our balance sheet strength. The project’s solid economics across various price scenarios demonstrates our disciplined approach to capital allocation and our commitment to creating sustainable value for our shareholders.”

The new CPP unit is set to replace the mobile offshore production unit (MOPU) Ingenium currently working in the field, which is scheduled for decommissioning in late 2027.

After reviewing several different redevelopment scenarios for the Wassana field, the company opted for a new CPP with 24 production well slots. This development concept, thought to be optimal, is slated to yield the highest financial returns and the maximum total recoverable oil from the license.

The new CPP is expected to allow for a more holistic commercialization of the field’s oil reserves and enable a more aerially extensive drilling reach and prolong the facility design life. The target plateau rate for the CPP is envisaged to exceed 7,500 barrels per day once the MOPU is decommissioned. 

Given the MOPU’s age, its capacity is limited to approximately 2.5 million barrels (mmbbls) of oil. According to Valeurea, the facility is also limited in the number of future development wells that could be drilled and has insufficient oil and fluid processing capacity to recover the expected reserves and resources of oil in the G10/48 licence.

Furthermore, the MOPU’s age and processing system are said to carry the highest unit adjusted operating expense (OPEX) of all Valeura’s Gulf of Thailand assets. Last summer, the production at the field was stopped after an anomaly was spotted at one of the unit’s legs. The production was to resume in early August 2024.

Mirroring the Nong Yao A facility, Valeura says the CPP has been designed to also accommodate future growth opportunities through the eventual tie-in of additional oil accumulations both to the north and to the south of the Wassana field.

Thai Nippon Steel Engineering & Construction has been put in charge of engineering, procurement, construction, and commissioning (EPCC) of the CPP facility. 

Total capex for the CPP and all of the export pipelines and facilities is estimated at$120 million, of which approximately $40 million is planned to be spent in 2025, and the remainder in 2026. The current plan is for the CPP to be fully installed and ready to start development drilling in late 2026.

The initial drilling campaign entails 16 horizontal development wells and one water injection well. Based on rig rates that Valeura contracted in 2024, the estimated cost of each development well is approximately $4.8 million.

However, the firm believes that the drilling capex for the Wassana redevelopment could be lower if the trend of rates for jack-up drilling rigs and materials observed in the past few months continues.

The reason for this could be a slump in rig demand combined with a boost in supply, recently noticed by Westwood. The energy market intelligence research firm also forecast a ramp-up in the rig retirement trend.

Netherland, Sewell & Associates (NSAI) was commissioned to assess the reserves and contingent resources at the G10/48 license, all of which are deemed to be heavy oil reserves. The firm had already assessed this in its 2024 report, but this was based on the most conservative redevelopment concept that delivered relatively low reserves.

With the FID of the CPP-based redevelopment concept now in place, the reserves have now been estimated to be higher, taking into account the planned new facility, increased number of wells, and their associated production profiles and costs.

Following reassessment, Wassana is estimated to hold proved plus probable (2P) reserves of 20.5 million barrels, representing an increase of approximately 18 million barrels compared to the continuing production with existing infrastructure only.

“Since assuming operatorship, we have identified substantially more reserves than were initially estimated at the Wassana field. Beyond the significant increase in reserves and extension of field life, this project is expected to significantly increase production from the field to 10,000 bbls/d in the second half of 2027, at anticipated unit Adjusted Opex reflecting a reduction of approximately 2/3rds versus current rates,” noted Valeura’s CEO.

As the EOFL for the Wassana field is now scheduled for 2043, the Canadian player plans for the CPP to include two risers to allow for satellite field tiebacks. Valeura claims to have identified accumulations of oil to the north of Wassana at the Nirami field, which may form the basis for one satellite development.

Additionally, 3D seismic south of the Wassana field, close to the Mayura oil discovery, is being reprocessed to support further appraisal drilling in this area.

Commenting on future expansion plans, Guest pointed out: “Additionally, this development concept is creating opportunities for further growth through a ‘hub and spoke’ model whereby we can potentially tie-in the satellite oil accumulations already discovered both north and south of the main Wassana field. This approach has been highly successful in both our Jasmine and Nong Yao fields.”

Development of these satellites would extend both the plateau production from the CPP and the ultimate field life. As explained by the Canadian player, the CPP concept facilitates the development of satellite fields with minimal wellhead platform infrastructure, resulting in the potential for cost-efficient tieback operations. The firm believes such incremental production will bear even lower adjusted opex than the cost of the production tied directly to the CPP.

Valeura has also been keeping busy with its other projects in the Gulf of Thailand. In March, the firm completed its five-well drilling campaign at the Manora oil field in license G1/48 that kicked off in late November 2024. Borr Drilling’s Misto rig was used for the assignment.

The rig then moved to license B5/27, in which Valeura holds a 100% operated interest. At the time, a drilling program on the Jasmine C wellhead platform was underway at the field.