'Petroleum concession system managed transparently'
The petroleum concession system is transparent under the supervision of the Energy Ministry's Department of Mineral Fuels, which will not allow smuggling of oil, ministry permanent secretary Areepong Bhoocha-oom said.
He added that the department believes a new management system for the concession blocks due to expire in 2022 would provide more benefits to the state.
Meanwhile Chevron seeks a clear picture on the government’s policy five years in advance in order to finalise its plans to participate in the 21st round of petroleum concession bidding.
On Tuesday, Areepong, deputy permanent secretary Twarath Sutabutr, Mineral Fuels Department director-general Puangthip Silpasart and Pairoj Kaweeyanun, president of Chevron Thailand Exploration & Production, led the media on a visit to the exploration operations at the Platong concession block, one of those due to expire in 2022. Areepong said the objective of the visit was to help the media understand that the management process for oil exploration under the concession system is being carried out in accordance with accepted international standards and regulations, ensuring that alleged smuggling of oil was not allowed.
The Platong oil-and-gas block is managed by Chevron, whose co-investors are Mitsui Oil Exploration Co and PTT Exploration and Production. The concession block produces an average of about 26,000 barrels of crude oil per day. The concession was granted on March 1, 1972, and is due to expire on April 23, 2022.
“The Energy Ministry is considering ways to manage the petroleum concession blocks that are due to expire in 2022 to allow continuity of investments and oil production. We must decide this year which management system to adopt in place of the previous ‘Thailand One’ concession system,” Areepong said. Current demand for natural gas in Thailand is about 5 billion cubic feet a day, compared with the local production of 3 billion cubic feet a day, or 76 per cent of demand.
Puangthip said the state must reap more benefits from the management of the Chevron and PTTEP concession blocks (which will expire in 2022 and cannot be renewed) than under the “Thailand One” system. There is no conclusion as yet on which management system to select, such as “Thailand Three”, production sharing contract, or a production-as-per-order system.
The Mineral Fuels Department will hire a reputable consulting firm with expertise in the petroleum industry to appraise the assets value at the concession blocks. That information will serve as the basis for future decisions.
Pairoj said Chevron was ready to work with the state under the concession system or production-sharing contracts. But it needs a clear direction of the state’s policy five years in advance, as negotiations for each drilling pit need about three years of preparation.
The natural gas produced by Chevron is about half of total output.
