Thai energy minister cancels 21st oil concession bid

[webfact]

Energy minister cancels 21st oil concession bid



BANGKOK: -- Energy Minister Narongchai Akaraseranee on Thursday endorsed an announcement calling off the 21st round of petroleum exploration and exploitation concession auction.

The cancellation of the bidding is in line with the government’s latest decision to put off the international bidding until the existing Petroleum Act is amended as demanded by civic and energy activist groups.

The National Legislative Assembly has been assigned to amend the 44-year old petroleum law in three months’ time.

The activist groups have contended that they are not against the bidding but they wanted the law to be amended first to ensure fairness and better benefits for Thailand regarding the exploitation of oil and gas of both offshore and onshore.

Source: http://englishnews.thaipbs.or.th/energy-minister-cancels-21st-oil-concession-bid


-- Thai PBS 2015-02-26

[Soutpeel]

and of course while they circle jerk and no decision is bring made, Thailand's reserves of gas will deplete causing them to import more gas at a higher cost and in the end the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else.

[Plowman]

The Generals have caved to the ultra nationalist right wing nutters both with this decision and with the all out assault on the Shinawatras. It's all falling to pieces on them rather quickly, counter coup anyone?

[WorriedNoodle]

Anyone think this will be more of a deterrent to investors, not that there might have been many before? Reference the earlier Nation news link ( http://www.nationmultimedia.com/business/PM-defers-concession-bidding-for-Act-rewrite-30254813.html ) and the glorious leaders response from it?

When asked how the government would create confidence for investors while the law is amended, Prayut said he couldn't say - and suggested they put the question to those opposing the awarding of a new round of concessions.

"Ask them [Rosana's group], don't ask me. I'm not the person who initiates the matter or delays the process," he said. "They told me to be open for people's opinions, now I have. But why do you ask me about investors' confidence?"

[rametindallas]

and of course while they circle jerk and no decision is bring made, Thailand's reserves of gas will deplete causing them to import more gas at a higher cost and in the end the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else.

the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else.

Where are they to go? They are businesses and don't get their feeling hurt and so take their ball and go home. With oil prices falling, more and more drilling operations are being shut down because existing sources of oil/gas are so much cheaper that finding/producing new sources. These drilling and exploration companies will soon be willing to make a better deal, in Thailand's favor, then. In the mean time, importing oil is cheaper than looking for new sources as long as they don't delay too long. Domestic sources, even if more expensive, are crucial to giving the nation energy security.

The activist groups have contended that they are not against the bidding but they wanted the law to be amended first to ensure fairness and better benefits for Thailand regarding the exploitation of oil and gas of both offshore and onshore.

[rametindallas]

The Generals have caved to the ultra nationalist right wing nutters both with this decision and with the all out assault on the Shinawatras. It's all falling to pieces on them rather quickly, counter coup anyone?

Cheap shot, much?

[Commander Tamson]

Makes perfect sense! The Thais know better than any Johnny Foreigner how to get oil and gas, either out of the ground or out of the bottom of the sea. The concessions should only be given to Thai companies, or companies with 51% Thai ownership. In no time at all the World will falling over each other to buy Thai oil at $100 plus a barrel.

[webfact]

Oil concession bids cancelled pending change to Petroleum Act
The Nation

BANGKOK: -- Energy Minister Narongchai Akrasanee yesterday withdrew the invitation for private companies to submit applications to explore for oil under the 21st bidding round, postponing it until the amendment of the Petroleum Act.

The announcement follows a decision to delay the process to bid for government oil and gas concessions.

Narongchai said once the Act was amended, new invitations for bids would be announced and the application submission period would last 120 days. Narongchai said previously that only one company had submitted a bid.

He said the termination of the invitation might impact on the country's credibility but the new law needed to be made.

The sooner the new bidding round is held and oil exploration began, the faster the government can map out its energy management plan, he added.

It takes between three to five years to finish the construction of an oil-drill platform.

To deal with the energy demand, Narongchai said PTT had imported liquefied natural gas.

He said the company's existing gas storage had an annual capacity of 5 million tonnes. It was constructing a second storage tank with the same capacity. The minister said Thailand was prepared to purchase a greater amount of electricity from nearby countries if it could not construct new coal-fired power plants. However, the import of electricity would be capped at 20 per cent of the total energy source.

Meanwhile, a Master Poll revealed that 84 per cent of people agreed with the government's plan to try to bring together two groups of people who have contrasting views on how to manage the country's energy resources.

One group supports the concession system while the other prefers the production-sharing contract system.

Another 16 per cent of respondents said they were not sincere in sharing information and the government's plan was a waste of their time and not necessary.

The survey conducted on 1,200 people aged more than 18 years in Bangkok and its vicinity found that 22 per cent of respondents monitored the media for information about the energy sector every day over a 30-day period.

When asked whether they watched the government's energy forum last Friday via a live broadcast, about 15 per cent said they monitored all issues while half said they monitored some issues. The remainder said they did not monitor all of it.

Source: http://www.nationmultimedia.com/business/Oil-concession-bids-cancelled-pending-change-to-Pe-30254954.html


-- The Nation 2015-02-27

[Soutpeel]

and of course while they circle jerk and no decision is bring made, Thailand's reserves of gas will deplete causing them to import more gas at a higher cost and in the end the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else.

the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else.

Where are they to go? They are businesses and don't get their feeling hurt and so take their ball and go home. With oil prices falling, more and more drilling operations are being shut down because existing sources of oil/gas are so much cheaper that finding/producing new sources. These drilling and exploration companies will soon be willing to make a better deal, in Thailand's favor, then. In the mean time, importing oil is cheaper than looking for new sources as long as they don't delay too long. Domestic sources, even if more expensive, are crucial to giving the nation energy security.

The activist groups have contended that they are not against the bidding but they wanted the law to be amended first to ensure fairness and better benefits for Thailand regarding the exploitation of oil and gas of both offshore and onshore.

by your remarks you obviously have very little insight into how the industry works

Where are they to go? -

they don't go anywhere they just shut down, all operators are MNC's - Thailand is only 1 operation, its only a very small part in their world wide operations, just think of it of the likes of Toyota closing a factory in a specific country, its the same thing, no ones feelings are getting hurt, its just business.

As to your second point which I am not sure what exactly the point is your trying to make ?

I don't know why your focused on oil, Thailand has very little oil to start with, the primary driver is gas, and under the current system, the government is being "sold it" at a discount rate

to ensure fairness and better benefits for Thailand....let me translate this for statement for you

its called nationalization, yes dear reader this is what they are up

one of the proposals on the table is production sharing on a 70/30 split, as opposed to the current royalty system, in other words "they" want the "government" to receive 70% of the gross, while the operator only gets 30%, but here is the amusing bit, the government invests nothing and the operator is expected to front the cost and take all the risk.

No operator including the likes of PTTEP would go for something like this

operators in in the business of making profits and if they cant make profits, they shut down and operation as its not financially viable, if the powers that be make producing oil & gas in the gas, not financially viable, they will shut up shop...its that simple

[plachon]

and of course while they circle jerk and no decision is bring made, Thailand's reserves of gas will deplete causing them to import more gas at a higher cost and in the end the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else.

the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else.

Where are they to go? They are businesses and don't get their feeling hurt and so take their ball and go home. With oil prices falling, more and more drilling operations are being shut down because existing sources of oil/gas are so much cheaper that finding/producing new sources. These drilling and exploration companies will soon be willing to make a better deal, in Thailand's favor, then. In the mean time, importing oil is cheaper than looking for new sources as long as they don't delay too long. Domestic sources, even if more expensive, are crucial to giving the nation energy security.

The activist groups have contended that they are not against the bidding but they wanted the law to be amended first to ensure fairness and better benefits for Thailand regarding the exploitation of oil and gas of both offshore and onshore.

by your remarks you obviously have very little insight into how the industry works

Where are they to go? -

they don't go anywhere they just shut down, all operators are MNC's - Thailand is only 1 operation, its only a very small part in their world wide operations, just think of it of the likes of Toyota closing a factory in a specific country, its the same thing, no ones feelings are getting hurt, its just business.

As to your second point which I am not sure what exactly the point is your trying to make ?

I don't know why your focused on oil, Thailand has very little oil to start with, the primary driver is gas, and under the current system, the government is being "sold it" at a discount rate

to ensure fairness and better benefits for Thailand....let me translate this for statement for you

its called nationalization, yes dear reader this is what they are up

one of the proposals on the table is production sharing on a 70/30 split, as opposed to the current royalty system, in other words "they" want the "government" to receive 70% of the gross, while the operator only gets 30%, but here is the amusing bit, the government invests nothing and the operator is expected to front the cost and take all the risk.

No operator including the likes of PTTEP would go for something like this

operators in in the business of making profits and if they cant make profits, they shut down and operation as its not financially viable, if the powers that be make producing oil & gas in the gas, not financially viable, they will shut up shop...its that simple

Rametindallas made far more sense in his post than you. You said, quote: "while they circle jerk and no decision is bring made, Thailand's reserves of gas will deplete causing them to import more gas at a higher cost and in the end the current operators will get fed up with the uncertainly and put their capex and exploration resources somewhere else", suggesting that delaying a decision now will cause locally-based, but foreign, suppliers of gas to pack up and piss-off home, which presumably means the gas will be left in the ground, not exploited, so how then will reserves deplete? Or are you suggesting they will leak out the ground by themselves unless foreign producers are there to pump them out? Secondly, because gas supplies might have to be imported, it does not necessarily follow that they will be more expensive than those produced locally. Gas supplies from Burma or Oman or other ME locations might be much cheaper than locally-produced gas, which has high costs of production and it makes far more sense at the moment to import it, especially as PTTEP has several offshore operations these days. Same goes for oil.

Your logic really seems to be lacking, but I do sense a knee-jerk fear of "nationalization" and any wish by leaders or civil society organizations to get a better deal for the country. Go ask the average Mexican whether they are glad their govt nationalised Pemex, rather than allowed US and Western companies to rape their reserves, and see what kind of response you get. Nationalization is not a panacea, but I would say it beats the US-model of privatized rape of natural resources, where benefits accumulate to the Bushes of your country, not the average Joe Blow.

[NanLaew]

The primary change being sought is towards the Production Sharing Contract (PSC) to replace the antiquated, investment stifling and totally inappropriate Concession agreement. There's more than one current foreign-owned operator in Thailand hoping for this proactive step-change in oil and gas exploration in Thailand.

If one is looking for a PSC success story, look no further than near-neighbour Vietnam where exploration, development and new production has been very active since early 2003-4. Even Indonesia's moribund Exploration & Production industry has been given a much-needed, fast-tracked, recent re-jigging of their exploration laws and it didn't take their newly elected, populist President 120 days to mull it over either. Meanwhile, the Thai government admits that the recently announced and subsequently canceled 21st round of bidding had attracted only one French firm, TOTAL.

Currently, Thailand's mandarins and generals personally have way too much to lose with their vast holdings on current exploration concessions. Thus it is very easy to invoke the myopic but popular nationalist aspect when faced with the arguments of economic progress that benefits ALL Thai citizens. There are concession in the far north that have had only nominal exploration carried out over the last 25 years. These are held in perpetuity by the Defence Energy Department (aka the Army) and they are not about to give up the lucrative (to them) leasehold on their current oil and gas concessions.