The Thailand subsidiary of Chevron Corporation (CVX) started natural gas production at its $3.1 billion Platong II project in the Gulf of Thailand. The venture is expected to generate almost 18,000 barrels of natural gas liquids daily.
Chevron targets to boost natural gas production to 330 million cubic feet per day to meet the high energy requirement in Thailand. With this project, the country’s domestic production will go up by 10% and Chevron’s net natural gas production from the Gulf of Thailand will improve by more than 20%.
Located in shallow water 120 miles from Thailand's southern coastline, the block is one of Southeast Asia's most prominent fields. The project boasts of advanced infrastructure comprising a central processing platform, pipelines, four initial wellhead platforms, and living quarters for 200 employees.
Chevron Thailand acts as the operator of Platong II with a 69.9% interest. The remaining stake is controlled by Mitsui Oil Exploration Co. Ltd. (27.4%) and PTT Exploration and Production Public Co. Ltd. (2.7%).
As per Chevron executive, Asia holds a lot of potential for global energy demand growth and the company through many of its developments is ready to make the most of this. Long-standing ties between Chevron and Thailand will help the company in building a foundation for energy security and long-term economic development.
San Ramon, California-based Chevron is one of the largest publicly traded oil and gas firms in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals and other energy-related businesses.
The company is scheduled to report third quarter 2011 earnings on October 28, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter is a profit of $3.42 per share, on revenue of $56,194 million.
The analysts have an optimistic view on Chevron's third quarter results, reflecting a bundle of developments projects across the globe, a healthy balance sheet and strategic initiatives.
However, due to its integrated nature, Chevron is particularly susceptible to risks from continued weakness in the global economy. We are also concerned by the company’s high level of capital spending and competition from peers BP plc (BP) and Exxon Mobil Corporation (XOM).
As such, we see the stock performing in line with the broader market and maintain our long-term Neutral recommendation on the stock. Chevron currently retains a Zacks #3 Rank (short-term Hold rating).
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