Chevron committed to Thailand despite global cuts

United States-based energy giant Chevron Corporation is committed to remaining in Thailand despite staff cuts in the Kingdom and around the globe because the company views its Thai holdings as among its essential assets, Chevron’s head of exploration and production in the Asia-Pacific region said last week.

“The core assets that we operate in the Gulf of Thailand are a core part of Chevron’s portfolio and we have every intention of it remaining a core part of our portfolio. We are not leaving Thailand,” Stephen Green, president of Chevron Asia Pacific Exploration and Production said in the statement.

Chevron is one of the largest oil and gas companies in the world, and in 2014 Fortune ranked it third on the magazine’s Global 500 list of the world’s top companies. But the California-based oil giant has been struggling financially in recent years because of the steep drop in oil prices. Earlier this year, it announced a 25 percent cut in spending, reductions in investments, and said it would be laying off over 8,000 workers, or about 12 percent of its workforce. Chevron employs over 1,600 people in Thailand having let go 800 people earlier this year in order to achieve cost cuts totaling $500 million. The company also uses another 1,300 contractors in the Kingdom.

The company operates several oil and gas exploration and production blocks in Thailand, with its main concessions being in the Gulf of Thailand, and includes the Erawan Field. The concessions are slated to expire, however, in 2022 and the Thai government has already said it would put them up for auction next year.

“We are focusing our resources on our operated assets. We’re happy to keep it if the market value of it is not what we think it should be,” Green said in the statement.

If no other bidders emerge, Chevron will be able to have the concessions extended. A Chevron spokeswoman told the Bangkok Post that the company has not decided if it will participate in the auctions, but that “they are willing to work with the government.”

Chevron and its partners said they intend to invest roughly $2.9 billion this year on projects in the Gulf of Thailand. To maintain its production levels, the company drills between 300 and 400 wells each year.

Chevron also operates gas blocks in the Indian Ocean under concessions from the Myanmar government. Much of that gas is fed to power plants in Thailand. Chevron said it is willing, however, to sell its gas blocks under Myanmar concessions, and Thailand’s energy giant PTT has expressed interest in buying them.

Image credit: chevronthailand.com