NGO pushes for production sharing in oil exploration bids
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The People's Network for Energy Reform has urged the government to include special conditions in the amendments to the petroleum act so as to allow the use of a production sharing contract (PSC) in the upcoming round of bidding for oil and gas exploration
Ittabul On-wongsa, coordinator of the non-government organisation that had previously opposed the Energy Ministry’s plan to go ahead with the bidding, said NGOs are also working together to submit a new bill on petroleum resources management for consideration by the National Legislative Assembly.
Energy Minister Narongchai Akrasenee said yesterday his ministry would go ahead with the invitation to international investors to submit bids for the 21st round of petroleum exploration and production in Thailand in June 2015 after it was delayed earlier this year.
Ittabul said a new petroleum act will take time so it is better for the government to reserve the right to apply the PSC method for selected tracts in the 21st round of bidding by amending the current law, citing G4, G5, and G6 as examples of concession tracts that have high potential for oil and gas.
Under the current system, the country gets a fixed rate of benefits from petroleum resources produced under concession by the private sector, with benefits ranging from 5-15 per cent of the total amount, plus a hefty tax on net profits and signature bonuses.
However, the People’s Network for Energy Reform and other NGOs have lobbied for the use of the PSC method, which takes time and requires additional mechanisms for implementation, but they believe it would yield more benefits to the country.
However, the government is worried that further delays in the 21st round of bidding will jeopardise the country’s energy security; hence, it wants to press ahead with the schedule to start the bidding process in June this year.
Ittabul said the next round of public hearing on energy reform will be on May 7 and NGOs hope the government will include the special conditions for the PSC method in the 21st round of bidding so that public benefits will not be compromised.
In addition, the government should facilitate new investors to compete in the upcoming bidding so that it was not only previous concessionaires who would gain the most from the new round of bidding, he said. The NGOs will closely watch details of the latest development on inviting bids for petroleum exploration and production, he added.
