Thai Govt Says Next Licensing Round to be Held After 2005
Wednesday, August 13, 2003
The Government of Thailand says that it will make changes to its next licensing round to speed up the bidding process and implement more favorable terms for oil companies. The country just completed its latest bidding round after three years of delays. Eight onshore and offshore blocks were awarded to seven international oil companies.
"The new round of licensing will be more business-oriented, take a shorter period. The conditions must be more attractive since we will try to understand the business needs of investors," Energy Minister Prommin Lertsuridej said. "The last round of licensing couldn't be seen as a precedent since there were changes of governments and a lot of confusion."
Prommin said the Department of Mineral Fuels was reviewing its conditions for bidders and evaluating its oil and gas reserves to attract potential investors, especially in the natural gas business. Thai officials said improvements to the bidding conditions could include a review of revenue sharing, royalty fee and initial investment requirements, but nothing had been finalized. "We have relied on gas for some time and we will continue to rely on gas for quite a long time. We want to expand this supply base," Prommin said.
Natural gas accounts for 36 percent of energy fuel use in Thailand, which has reserves capable of meeting domestic demand for 35 years, and about 37 trillion cubic feet of probable and possible reserves. Proven and possible crude oil reserves stand at 461 million barrels as of December 2002, official data shows.
Nopadon Mantajit, head of the Department of Mineral Fuels, said the next round of bids for exploration and production licenses could be in 2005 at the earliest, since his staff was evaluating reserves and amending the bidding conditions to match market reality. "We have fewer oil and gas reserves than Indonesia or Malaysia, but our conditions have been better and we want to maintain that competitive edge," Nopadon said.