PM defends the need to call bid for petroleum concessions

[Lite Beer]

PM defends the need to call bid for petroleum concessions

BANGKOK: -- Prime Minister Prayut Chan-ocha said today (Friday) that it was necessary for the government to call bid for oil exploration and production because the existing gas and oil reserves in the offshore and onshore wells will run out in the next four years.

In defence of the Ministry of Energy, he said that the ministry is duty-bound to find new gas and oil resources to ensure sufficient supplies to meet domestic demand.

He explained that the 29 offshore and onshore blocks to be auctioned out were old blocks that were already explored and drilled for use but their existing concessions are about to expire and, therefore, need to be extended.

He said that the companies which won the concessions would have to pour in huge investment and take the risk because it was not known whether they would strike oil or gas of sufficient amount for commercial production.

The bid has to be staged several years in advance because the oil companies need ample time to make preparations, said the prime minister adding that the government is not capable of undertaking the exploration and production and, therefore, has to grant concessions to others.

However, he said the government would see to it that the country would get a fair share of benefits from the concessions.

Commenting on the opposition against the planned bid for the oil concessions by the consumer protection and anti-oil lobby, the minister pointed out that the problem stemmed from the stubbornness of both sides and their refusal to listen to the opinions of each other.

Source: http://englishnews.thaipbs.or.th/pm-defends-need-call-bid-petroleum-concessions/

-- Thai PBS 2014-10-24

[terryp]

more BS ...i see everyday the great changes all the oil & gas pumped out of thai waters (that is about to run out) has done for the average person inc the poor in thailand (basically nothing...no welfare system etc etc)

just more corporate greed of which this guy will no doubt will get his % .......only thing i saw was pump and lpg prices INCREASING after Thaioil was privatized

Edited October 25, 2014 by terryp

[chainarong]

Mostly everywhere oil and gas concessions are called for and tenders placed , the startling point is that there is only four years left in the present fields , in the event that commercial supplies are not found Thailand is indeed in for a price rise , one hopes that commercial fields are found, although four years to prove up and fully develop is a short time frame, the Thai Administration had better cross more than there collective fingers for a positive out come.

[noitom]

Everyone knows that traditional Thai style bidding on oil exploration rights has foreign oil companies paying an initial "cut" of 20% to Mr. Thai 20%. This money gets paid whether they find oil or not. The Thai Mr. 20%s show up periodically to dip in. Nothing will change in the Thai oil development process. Ordinary Thais will never see any benefit from oil discoveries in Thailand's gulf. Ordinary Thais have no comprehension of how the Thai business class elite has siphoned off these oil royalties.

[WorriedNoodle]

The corruption aspect is endemic throughout society - not just in oil & gas. You still need to find O&G and keep supplies running, so the arguments against are mute points.

It's been seven years since last concession tender and the Thailand concession map today looks bare. Like others have said there may not be many bidders anyway as most of the blocks on sale have been done before. Perhaps newer technologies available today may help delineate hard to interpret areas but I don't see much coming from this.

[apetley]

At least the blocks will be techically fairly easy to develop but why on earth leave it until, in industry timescales, the last minute before even putting it all out to tender?

[ChrisY1]

It takes approximately 10 years to develope a gas field from zero to production.....often, much longer.

As is usually the way here, and the good general now claiming only 4 years of local supply..... indicates the level of non forward planning of the Thais.......wait untill we run out before action.

Could we see Shell, Chevron, Exxon and other big players being able to bid???.....My guess is a definate no!

My hope is that there are no coal seam gas reserves, as local exploration and developement Oil & Gas companies would destroy the environment!

[RBOP]

In Thailand, in the past few years, an average of 600 new wells were drilled per year just to maintain present production. Without new Concessions and expiring fields, Thailand will very soon be importing all its Energy. Yeah yeah, a small percent comes from biogas, solar etc, but that a very small percentage and no where in the world is there a country that has higher alternative energy vs. fossil fuel. Technology and feasible costs just isn't there yet to depend on alternative energy. Fusion is still decades away.

[marcusd]

From my reading of GOOGLE searches, there are NO COMMERCIAL quantities of oil in the Gulf of Thailand. PTT is drilling off Australia. 4 years is leaving it VERY LATE and Burma is Thailand's main source of power supplies. And boy, do they know how to cut off the hand that feeds them - .... two kids in a gaol (jail for USA people) regarding a certain trial underway...

And as for oil reserves and gas reserves? Thailand is not looking so good.

As an export nation they need to really look at things SERIOUSLY as the GOLDEN days of not having many competitors out there are GONE. Vietnam is an oil exporter and has large gas reserves as does Indonesia and they are on the way up in ASEAN and making it VERY easy for foreigners to invest and OWN a business.

Electricity is not cheap. Wages have risen. Food is way overpriced considering average THAI SALARIES. Things are changing and sitting down and expecting hoards of tourists investors and so forth is not how it is now done.

[RBOP]

Petroleum E&P is a very high-risked business due to high investment and high possibility of failure or no commercially viable petroleum discovery. However, the return on investment could be high if the discovery is sizeable and can be exploited for commercial use. The cost of exploring, developing, and producing petroleum in Thailand is considered very high relative to sizeable petroleum fields in other countries because Thai reservoirs are heavily separated and cut up by countless faults into small pockets. Therefore, Thailand needs many more wells to be drilled so as to produce the same amount of daily output produced by only one massive well in one of those major oil-producing countries. If the government’s take is too high, not only would potential investors not invest because of low returns when considering such massive investment, but many small indigenous fields would also be lost and not developed, even when the oil price exceeds $100 a barrel. http://www.dmf.go.th/resources/annualReport/annual/en/annualReport_th_2013.pdf

[toolpush]

The poster who says that there are no commercial oil quantities in the Gulf of Siam might want to tell Pearl Oil (Mubadala) or Salamander. They are both producing oil in the Gulf of Siam.

As to not benefiting the poor in Thailand? How about relatively inexpensive & clean electricity provided by the Natural gas industry? Or all the high paying jobs related to all the offshore oil activity?

[marcusd]

The poster who says that there are no commercial oil quantities in the Gulf of Siam might want to tell Pearl Oil (Mubadala) or Salamander. They are both producing oil in the Gulf of Siam.

As to not benefiting the poor in Thailand? How about relatively inexpensive & clean electricity provided by the Natural gas industry? Or all the high paying jobs related to all the offshore oil activity?

I posted the comment about Gulf of Thailand oil reserves.

Here is a little brief google search. Please try and find Thailand on the list There is nothing worthwhile. I also have a friend high up in SHELL OIL in Malaysia. he says the reserves being explored now have been known for years and Thailand is desperately cleaning up any small deposits they can find. because of existing infrastructure it makes it economically feasible but to invest in NEW wells is going to be something SHELL will look at seriously due to the high cost and low possible outcomes.

I am sure if this is true then other players will look carefully before spending money

http://en.wikipedia.org/wiki/List_of_countries_by_natural_gas_proven_reserves

[RBOP]

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The poster who says that there are no commercial oil quantities in the Gulf of Siam might want to tell Pearl Oil (Mubadala) or Salamander. They are both producing oil in the Gulf of Siam.

As to not benefiting the poor in Thailand? How about relatively inexpensive & clean electricity provided by the Natural gas industry? Or all the high paying jobs related to all the offshore oil activity?

I posted the comment about Gulf of Thailand oil reserves.

Here is a little brief google search. Please try and find Thailand on the list There is nothing worthwhile. I also have a friend high up in SHELL OIL in Malaysia. he says the reserves being explored now have been known for years and Thailand is desperately cleaning up any small deposits they can find. because of existing infrastructure it makes it economically feasible but to invest in NEW wells is going to be something SHELL will look at seriously due to the high cost and low possible outcomes.

I am sure if this is true then other players will look carefully before spending money

http://en.wikipedia.org/wiki/List_of_countries_by_natural_gas_proven_reserves

The link you gave shows Thailand ranked #38.

Download this report. You can read all about Oil&Gas in Thailand. http://www.dmf.go.th...ort_th_2013.pdf

Edited October 25, 2014 by RBOP

[IAMHERE]

"He said that the companies which won the concessions would have to pour in huge investment and take the risk because it was not known whether they would strike oil or gas of sufficient amount for commercial production."

Wasn't there a TV topic last week or so about 6000 explosions a Chinese company was doing somewhere that was harming peoples houses? That was soundings for finding what was in the ground. So somebody somewhere knows something.

[rickirs]

This is where energy sustainability meets economic practicality. The Junta needs cash now to stimulate the economy and get that 5% GDP growth rate next year to hold up his House of Cards. Government tax collections are falling short again, government is already borrowing billions for new populist outreach programs, domestic borrowing is increasing, and exports are dropping. Happiness Index can't buy a pack of gum.