Thailand to Proceed with Exploration Block Bidding Round Despite Opposition
Thailand will proceed with its 21st petroleum exploration and production bidding round despite the National Reform Council (NRC) – an advisory institution established under the interim constitution set up after the military junta seized power last year – voting against it earlier this week, Energy Minister Narongchai Akrasanee said, as quoted in local daily The Nation Friday.
The Thai government is sticking to its plan for the bidding round, launched by the Energy Ministry last October, as a failure to do so would undermine its international credibility, Narongchai commented.
The Ministry Fuels Department will close bidding for 23 onshore blocks and 6 six offshore blocks Feb. 18.
Activists have lobbied NRC members to scrap the latest bidding round and pressured the Thai Energy Ministry to replace the current petroleum concession system with a production sharing contract (PSC) model. Such a model would require the successful bidder to assume the entire cost of investment and production, while net profit would be mostly shared with the government as the company takes a lesser cut, another local daily Bangkok Post said Friday.
"I would like to reaffirm that this concessionaire system is suitable for Thailand, which has little resources, which means risk ... Under this system, the find of a small petroleum field will be worthwhile for investment. But if a large field is found, it is even better," Narongchai revealed.
As for the concessions of Chevron Corp., which will expire in 2022, and Thailand's PTT Exploration and Production Public Company. Ltd. (PTTEP), which will lapse in 2023, Narongchai said the matter was under consideration by the Energy Ministry and a decision would be announced later this year.
Consultancy firm Wood MacKenzie commented last October that Thailand is moving "in the right direction by progressing the delayed 21st licensing round to ensure further acreage is fully explored and offer clarity on extensions of the expiring concessions. If clear guidelines are offered on the future of expiring licenses, the country could stimulate new investment in mature fields, potentially increasing recovery of their remaining resources."
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