21st round awaits order

The winners will be subject to the “Thailand Three” system – annual step-up royalty of 5 per cent to 15 per cent, 50-per-cent tax on net profit, and annual incremental special benefit payment from zero per cent to 75 per cent, depending on revenue and additional investment for exploration. The concessions for 22 fields awarded before 1989 are under the Thailand One system, while 54 fields are under Thailand Three.

Thailand One has generated investment of Bt1.1 trillion and Thailand Three Bt288.4 billion.

Songpope Polachan, director-general of the department, said yesterday that the missions that the department would have to achieve within three years to boost petroleum supply include holding the 21st bidding round and settling the dispute with Cambodia over overlapping marine territorial claims. 

Kurujit Nakornthap, deputy permanent secretary of the ministry, said the proven petroleum reserves of 9 trillion cubic feet of natural gas would last only eight years based on estimated demand of 5 billion cubic feet per day. Including probable reserves of 9.57 trillion cubic feet, the country will have enough natural gas for only 15 years. The new E&P round is needed to boost domestic supply.

The country’s petroleum-concession system could help save Bt500 billion per year of energy imports and create many jobs for Thais, Energy Minister Pongsak Ruktapongpisal told a seminar hosted on Tuesday by PTT and Srinakharinwirot University. 

More than 60 petroleum fields were found and commercially developed from 1986 to last year. They have supplied 17.5 trillion cubic feet of natural gas, 490 million barrels of condensate and 672 million barrels of crude oil, while contributing Bt1.32 trillion to the state, of which Bt160 billion was from last year.

Pongsak said the state had to earn appropriate income from the concessions, but if the fees were too high, no investors would enter the auction. 

Pairoj Kaweeyanun, president of Chevron Thailand Exploration and Production, said the company was keen to take part in the 21st round, if the government does not require a higher benefit payment.