Move To Utilise 2001 MOU On Maritime Negotiations: Gulf Of Thailand

[webfact]

Move to utilise 2001 MOU on maritime negotiations

The Nation

The Foreign Ministry will put a proposal to the Cabinet in two weeks to continue the 2001 memorandum of understanding (MOU) on maritime deals in the Gulf of Thailand, the ministry's spokesman Thani Thongpakdi said yesterday.

A ministry meeting chaired by Foreign Minister Surapong Towichukchaikul yesterday concluded that the MOU was useful as a framework for negotiations with Cambodia over maritime resources in overlapping areas claimed on the continental shelf, Thani said.

The Cabinet of former PM Abhisit Vejjajiva decided in November 2009 to denounce the MOU after Cambodian Prime Minister Hun Sen picked former Thai PM Thaksin Shinawatra as a government adviser.

The previous government feared Thaksin might disclose inside information to Hun Sen that might favour Phnom Penh.

However the MOU is still effective as Abhisit's government did not formally notify Cambodia that it had been revoked.

If the current Cabinet under Prime Minister Yingluck Shinawatra agrees to continue using the MOU, it would be submitted to Parliament for approval of as a negotiating framework, Thani said.

"Any negotiations would be conducted in accordance with the 2001 MOU, transparently for the national interest," he said.

Yesterday's meeting saw the appointment of deputy director of Asean Affairs Pornchai Danvivathana as legal adviser to the joint technical committee for maritime negotiations. The committee itself would be co-chaired by Surapong and Cambodian Deputy Premier Sok An.

Career diplomat Vasin Teeravechyan was appointed as chief of a sub-technical committee.

Thailand and Cambodia signed the MOU in 2001 to kickstart negotiations on overlapping claims for the seabed in the Gulf of Thailand. The joint technical committee set up under the MOU would talk to delimit the sea boundary, as well as establish a joint development area in the Gulf.

Negotiations were stalled over the past two years due to political conflict and poor relations with Cambodia.

-- The Nation 2011-10-04

[scotbeve]

Chevron will probably be pleased with this..... Bloody hell, Mark could not have been more obstructive in this matter could he??? I guess war means money (for some...).

[Soutpeel]

I would suspect Chevron will not get a look in on this, pretty sure concessions would be "given" to PTT/EP

Will be interesting to see how this JDA would be set up and who the players are in the JV, have a feeling our man in Dubai's gardener will become a whole lot richer out of this deal if it comes off..

[MaiChai]

Seems to me that government is prioritizing business policies that benefit a particular group; eg the Shinawatras. This was always a deal championed by Taksin because it would ultimately financial benefit him in a big way. Taksin and Hun Sen were carving this deal out between themselves. Seems pretty clear to me.

[scotbeve]

I would suspect Chevron will not get a look in on this, pretty sure concessions would be "given" to PTT/EP

Will be interesting to see how this JDA would be set up and who the players are in the JV, have a feeling our man in Dubai's gardener will become a whole lot richer out of this deal if it comes off..

Chev poked some holes in that area before....

[phiphidon]

Seems to me that government is prioritizing business policies that benefit a particular group; eg the Shinawatras. This was always a deal championed by Taksin because it would ultimately financial benefit him in a big way. Taksin and Hun Sen were carving this deal out between themselves. Seems pretty clear to me.

Perhaps, not "quite so clear" As far as companies best placed to make money out of this, would it seems to be the companies Thailand has already granted exploration concessions to;

At present, several companies such as Chevron, BG Asia and PTT Exploration and Production hold petroleum exploration concessions granted by Thailand

http://www.nationmul...ss_30116591.php

A more in-depth (scuse the pun) account of the benefits to Thailand whichever way the the overlapping claims area (OCA) dispute is finally agreed is here;

http://www.clc-asia....-gas-resources/

(Thai Proposal for OCA)

In the absence of firm data on reserves in the OCA (exploration not being allowed given the ongoing dispute), experts have indicated that it makes intuitive sense that most of the exploitable reserves are located towards the Thai side of the OCA.

The result of this situation is that the Thai proposal for revenue sharing favours the Thai's, given the balance of the reserves that can be economically drilled sit on the Thai side of the OCA.

(Thailand Wins)

(Cambodian Proposal for OCA)

The Cambodian proposal for a 50/50 revenue split, though rejected by Thailand, would nevertheless see Thailand gain the largest slice of the overall economic pie. Thai companies have more than 30 years of exploration and production experience when compared to those in the Cambodian industry, which is still in its infancy. As such Thai based oil producers, exploration companies (e.g. PTTEP) and contractors would likely undertake the bulk of the work in the OCA and thus derive a majority of the benefits.

As such, the potential for compromise will largely rest on Thailand's ability to agree to a revenue sharing agreement which recognises the inherent external benefits that will accrue to Thailand.

(Thailand Wins)

[Soutpeel]

I would suspect Chevron will not get a look in on this, pretty sure concessions would be "given" to PTT/EP

Will be interesting to see how this JDA would be set up and who the players are in the JV, have a feeling our man in Dubai's gardener will become a whole lot richer out of this deal if it comes off..

Chev poked some holes in that area before....

Not in the disputed area they haven't.....you may be getting mixed up with the test wells in Cambodia water

[Soutpeel]

Seems to me that government is prioritizing business policies that benefit a particular group; eg the Shinawatras. This was always a deal championed by Taksin because it would ultimately financial benefit him in a big way. Taksin and Hun Sen were carving this deal out between themselves. Seems pretty clear to me.

Perhaps, not "quite so clear" As far as companies best placed to make money out of this, would it seems to be the companies Thailand has already granted exploration concessions to;

At present, several companies such as Chevron, BG Asia and PTT Exploration and Production hold petroleum exploration concessions granted by Thailand

http://www.nationmul...ss_30116591.php

A more in-depth (scuse the pun) account of the benefits to Thailand whichever way the the overlapping claims area (OCA) dispute is finally agreed is here;

http://www.clc-asia....-gas-resources/

(Thai Proposal for OCA)

In the absence of firm data on reserves in the OCA (exploration not being allowed given the ongoing dispute), experts have indicated that it makes intuitive sense that most of the exploitable reserves are located towards the Thai side of the OCA.

The result of this situation is that the Thai proposal for revenue sharing favours the Thai's, given the balance of the reserves that can be economically drilled sit on the Thai side of the OCA.

(Thailand Wins)

(Cambodian Proposal for OCA)

The Cambodian proposal for a 50/50 revenue split, though rejected by Thailand, would nevertheless see Thailand gain the largest slice of the overall economic pie. Thai companies have more than 30 years of exploration and production experience when compared to those in the Cambodian industry, which is still in its infancy. As such Thai based oil producers, exploration companies (e.g. PTTEP) and contractors would likely undertake the bulk of the work in the OCA and thus derive a majority of the benefits.

As such, the potential for compromise will largely rest on Thailand's ability to agree to a revenue sharing agreement which recognises the inherent external benefits that will accrue to Thailand.

(Thailand Wins)

No EP company holds any concessions in the disputed area, as the area under question is disputed...

For this area to undergo exploration at Joint development area would need to be agreement to between Thailand and Cambodia and typically a Joint Venture Company (JV) is formed made up of both Thai and Cambodian representatives, the JV will then grant concessions to an the development to a 3rd party E&P company, such as PTTEP who would develop the area, with royalties on production paid to the JV, its with the JV that our man in Dubai will get his fingers in the till.

Further development of any possible reserves from the Thai side would prove very difficult due to the fragmented geology/deposits in the GOT (this is the reason there are so many Platfroms installed in the GOT, the deposits are very small and hard to hit even with a platfrom over them and direction drilling although theoretically possible would prove very expensive and possibly impractical.

[scotbeve]

I would suspect Chevron will not get a look in on this, pretty sure concessions would be "given" to PTT/EP

Will be interesting to see how this JDA would be set up and who the players are in the JV, have a feeling our man in Dubai's gardener will become a whole lot richer out of this deal if it comes off..

Chev poked some holes in that area before....

Not in the disputed area they haven't.....you may be getting mixed up with the test wells in Cambodia water

Hmmmm... perhaps you're correct here as the info I got was in a bar from Chev personnel. And (most likely) PTT will be the flavor of the month....

The JV with MY finally worked out so there's really no harm with going on with this one. There's a lot of pluses I can think of with this JV.

[phiphidon]

No EP company holds any concessions in the disputed area, as the area under question is disputed...

For this area to undergo exploration at Joint development area would need to be agreement to between Thailand and Cambodia and typically a Joint Venture Company (JV) is formed made up of both Thai and Cambodian representatives, the JV will then grant concessions to an the development to a 3rd party E&P company, such as PTTEP who would develop the area, with royalties on production paid to the JV, its with the JV that our man in Dubai will get his fingers in the till.

Further development of any possible reserves from the Thai side would prove very difficult due to the fragmented geology/deposits in the GOT (this is the reason there are so many Platfroms installed in the GOT, the deposits are very small and hard to hit even with a platfrom over them and direction drilling although theoretically possible would prove very expensive and possibly impractical.

"No EP company holds any concessions in the disputed area, as the area under question is disputed... "

Would it not be possible to hold a concession having been granted it for exploration, but NOT being able to do anything with that concession as the OCA is under dispute - that is what my second link to the report by the political and Market Intelligence people states - seems perfectly reasonable to me unless you have alternative information stating that no concessions have been granted? The first link is from the Nation newspaper so I will not take any responsibility for the usefulness of that info.

Joint Venture Companies and Thaksin - AFAIK Joint venture companies take risks and enjoy the dividends if it comes off so if Thaksin sets up a JV it seems to make sense he gets something out of it?

It seems that your opinion of the feasibility of hitting deposits in the Thai part of the OCA (if this is what you meant and not the whole of the GOT) economically are 180 degrees opposite to that of the Market Intelligence report;

In the absence of firm data on reserves in the OCA (exploration not being allowed given the ongoing dispute), experts have indicated that it makes intuitive sense that most of the exploitable reserves are located towards the Thai side of the OCA. This is because the Pattani basin, the oil field which contains most of the offshore oil and gas reserves in undisputed Thai waters,extends into the OCA. Conversely, geological formations in oil fields on the Cambodian side of the border have made drilling there challenging and uneconomic in some instances.

[Soutpeel]

"No EP company holds any concessions in the disputed area, as the area under question is disputed... "

Would it not be possible to hold a concession having been granted it for exploration, but NOT being able to do anything with that concession as the OCA is under dispute - that is what my second link to the report by the political and Market Intelligence people states - seems perfectly reasonable to me unless you have alternative information stating that no concessions have been granted? The first link is from the Nation newspaper so I will not take any responsibility for the usefulness of that info.

Joint Venture Companies and Thaksin - AFAIK Joint venture companies take risks and enjoy the dividends if it comes off so if Thaksin sets up a JV it seems to make sense he gets something out of it?

It seems that your opinion of the feasibility of hitting deposits in the Thai part of the OCA (if this is what you meant and not the whole of the GOT) economically are 180 degrees opposite to that of the Market Intelligence report;

In the absence of firm data on reserves in the OCA (exploration not being allowed given the ongoing dispute), experts have indicated that it makes intuitive sense that most of the exploitable reserves are located towards the Thai side of the OCA. This is because the Pattani basin, the oil field which contains most of the offshore oil and gas reserves in undisputed Thai waters,extends into the OCA. Conversely, geological formations in oil fields on the Cambodian side of the border have made drilling there challenging and uneconomic in some instances.

The area is under dispute.... who actually "owns" it.....so which country is in the position to award concessions to any EP operator ?......Thailand..No, as Cambodia will dispute that, and if Cambodia awards concessions, Thailand will dispute this, therefore no EP company in their right mind will conduct exploration/production in an area like this as who would they pay royalties to, whose legal frame work are they operating under all very messy, and contray to what you may think of EP companies they are on the whole very conservative and will not get involved in a possible international p*ssing match between two counties.

Thaksin will not set up a JV, as this would be conflict of interest because of his baby sister being involved in any agreement with Cambodia, he is a lot of things, but he aint stupid, Our man will have his fingers in the pie along with Cambodia "friends" by proxy.

On the so-called " Market intelligence report" is based on pure speculation by some "expert", as nobody at this stage knows what is in the "disputed zone" no test wells have been drilled, to date. There may or may not have been lines of seismic carried out from the Thai side, but this in itself doesnt really prove anything.

As pointed out in a previous post the geology of the GOT is fragmented, therefore there are small pockets of oil & gas all over the place and are very diffcult to hit with a platfrom right over the top of them.

Just because the Pattani basin contains the "most of the oil and gas, doesnt mean that there will be oil & gas in the Pattani basin in the disputed area adjacent to Thai waters, you are making a very simplist assumption, which may not be true.