PETR.L Share News (PETR)

* Seeks 10-20 pct stake in Petronas' SK 316 gas block

* Plans to develop gas to power project in Myanmar

* Reduce avg oil-gas cost to $29/bbl in 2017, from $43/bblin 2014

* Eyes expiring concessions in Mideast to add to output(Adds further comment from PTTEP executive, details oninvestment plans)

By Florence Tan

KUALA LUMPUR, March 21 (Reuters) - Thailand's PTTExploration and Production (PTTEP) is looking closerto home for upstream oil and gas assets in a drive to boost itsreserves and production as oil prices have recovered, a seniorcompany executive said on Wednesday.

"Now we're coming back more to the region. We're goodfriends with (Malaysia's) Petronas, but we didn't really dothings together. Now we have more collaboration and we have aproject to work together," Phongsthorn Thavisin, PTTEP'spresident of exploration and production, said on the sidelinesof the OTC Asia conference.

PTTEP has invested in 10 percent of Train 9 of MLNG and isexploring offshore block SK410B in Sarawak with Petronas, hesaid. The company is also in the second round of bidding for astake in another offshore Sarawak block, SK316, seeking a 10-20percent share, Phongsthorn said.

Last year, state-owned Petroliam Nasional Bhd (Petronas)kicked off a process to sell a stake of up to 49percent, worth an estimated $1 billion, in the SK316 offshoregas block in Malaysia's Sarawak state.

Besides PTTEP, Total and some Japanese firms arealso among those keen to bid for the asset, sources have said.

PTTEP also plans to bid for the Erawan and Bongkot gasconcession licences in an auction scheduled for April, anotherchance to raise its output and reserves.

The Thai government is due to announce the winners inDecember, which will give the companies time to invest tosustain a combined gas output of 1.5 billion cubic feet a dayfrom the fields before the concessions expire in 2022,Phongsthorn said.

PTTEP, which has $4.5 billion cash on hand, is also eyeingexpiring concessions in the Middle East that can boost itsoutput immediately and plans to invest in gas-to-power projectin Myanmar to meet the country's energy demand.

"We're looking to extend ourselves a little," he said.

Since the oil crisis in 2014, PTTEP has undergone cost cutsand increased efficiency which saw its average cost of oil andgas production falling to $29 per barrel last year from $43 perbarrel three years ago, he said.

Still, ratings agency Fitch expects PTTEP's reserve profileto remain weak for the next two years as the majority of itsassets are located in Thailand, where oil and gas reservoirs arescattered and relatively small.

PTTEP already holds an 8.5 percent stake in a $15 billionliquefied natural gas (LNG) project led by Anadarko Petroleumin Mozambique. The consortium will build two LNG trainswith a total capacity of 12.88 million tonnes per annum that areslated for completion in 2023.

"We are still trying to work out if PTT could commit to thisvolume (from Mozambique) either for Thailand or trading,"Phongsthorn said.

"The LNG market in the next few years could see more demandand supply could shrink a little. Everyone stopped investing forsome time and our industry needs time (to develop assets). Ithink in the future, you'll see short supply," he said.

PTTEP is also exploring solar power and batteriestechnologies for new revenue stream as it adapts itself to a newenvironment, Phongsthorn said.

Falling costs for solar panels have made them a viableelectricity source, and oil companies expect electric vehiclesto reduce oil demand after 2030.(Reporting by Florence Tan; Additional reporting by ChayutSetboonsarng in BANGKOK; Editing by Tom Hogue)