Malaysia-Thailand Joint Development Area

Background
Widely known by the abbreviation JDA, the wedge-shaped Malaysia-Thailand Joint Development Area covers an area of about 7,250 sq. km., formed by overlapping continental shelf claims between the two countries. The heart of JDA lies about 180 km from the shores of Pattani province, 260 km from the shores of Songkhla, and 150 km from Kota Bahru in Kelantan State of Malaysia.

The two governments jointly established the Malaysia-Thailand Joint Authority (MTJA) as a juristic entity to assume the rights and responsibilities of both countries in exploration and exploitation of non-living natural resources, particularly petroleum, in JDA. MTJA was empowered to award production sharing contracts to qualified companies.

The two governments agreed on sharing all expenditure and benefits to be derived from petroleum E&P in JDA.

JDA consists of three blocks, namely A-18, B-17, and B-17-01. The companies entitled to enter into contracts with MTJA were those concessionaires or contractors that had won such rights before the 1979 Malaysia-Thailand Memorandum of Understanding came into force. Holding 50% of the rights in each block were the following companies.
  1. For Block A-18, Triton Oil (now known as Amerada Hess Company of Thailand (JDA) Ltd.) of Thailand and PCJDA Ltd. of Malaysia jointly formed Carigali-Triton Operating Company Sdn. Bhd. (CTOC) to serve as operator for the block.
  2. PTTEP International of Thailand and PCJDA Ltd. of Malaysia jointly formed Carigali-PTTEP Operating Company Sdn. Bhd. (CPOC) to serve as operator for the block.
Exploration
CPOC planned 3D seismic exploration covering 300 sq. km. and drilling of a minimum of two wells, and if any of these wells is successful, CPOC is obliged to drill one or two more wells.


Development
Block A-18
Cakerawala Project
CTOC prepared to produce natural gas under the project in the following areas ranging from production well start-up, depreservation, retesting, to recommissioning and start-up of production facilities to be ready to deliver first gas at 390 MMcfd on 1 January 2005.

Transmission Pipeline and Malaysia-Thailand Gas Separation Plant Project The transmission pipeline project was completed in December 2004, as Trans Thai-Malaysia (TTM) commissioned and started up the pipeline around the same period. As for the gas separation plant (GSP-1), about 80% of the work had been completed, and is scheduled for project completion in December 2005.

Phase II Gas Field Development
CTOC was prepared to assess the remaining gas contained in Block A-18, as it opened bids for front-end engineering design, EIA, site survey, and soil investigation packages. The company also drilled two appraisal wells: Bumi-2 and Bumi-3.

Block B-17
CPOC studied subsurface data for use in modifying its field development plan and awarded basic engineering design rights to Technip Geoproduction. Reserves in JDA As of year-end 2004, the gas reserves* were summarized in the following table (in billion cubic feet, Bcf).

Block

Field

Proved

Probable

Possible

1P

2P

3P

A-18

9

3,367

1,830

4,317

3,367

5,197

9,514

B-17

9

1,205

1,013

2,119

1,205

2,218

4,337

Total

18

4,572

2,843

6,436

4,572

7,415

13,851

* Net of CO 2

2004 Milestones
  • September 30: Production sharing contract signing ceremony for Block B-17-01 between MTJA and contractors (PCJDA Ltd. and PTT International). The contract was to span 35 years (five for exploration, five for retention, five for development, and 20 for production).
  • December 23: Signing of Supplementary and Settlement Agreements under the Gas Sale Agreement governing Block A-18. The parties in question were MTJA, PCJDA Ltd., and Amerada Hess Company of Thailand (JDA) as sellers, with Petronas and PTT Plc as buyers. The ceremony took place in Kuala Lumpur, Malaysia.
Related Laws and Regulations Concerning MTJA
Through DMF, the coordination required for the approval of related laws and regulations concerning MTJA was completed during the year, including the following.
  1. Ministerial regulations governing royalty and other payments for petroleum development in JDA, to be made to the two governments; these regulations became enforced in both countries on 29 December 2003.
  2. Draft Customs Act (No. 20) B.E. 2548 (2005) and the Amendment to the Customs Tariff Act (No. 7) B.E. 2548 (2005).
  3. Ministry of Finance Announcement on the exemption of customs tariffs for items exported from JDA under the laws governing MTJA.
  4. Ministerial regulation governing approval procedure for the transport of gas between the Kingdom and Malaysia, B.E. 2548 (2005).