Four firms eye petroleum licence auction

Four firms eye petroleum licence auction

Four companies -- two of which are Thai -- are interested in participating in an auction for new petroleum exploration and production licences in the Gulf of Thailand, part of the state's efforts to increase domestic gas supply, says the Department of Mineral Fuels (DMF).

Last month authorities began the 24th round of auctions covering three offshore areas, excluding Erawan and Bonkot gas blocks, which are now operated by PTT Exploration and Production Plc.

The department expects to receive huge interest from investors because of the high prices of oil and gas in the global market, said Sarawut Kaewtathip, director-general of the DMF.

He declined to name the four companies, saying only that two of them are local firms.

Participants in the auction are required to submit their exploration and production proposals in September. The result of the bidding will be announced in February 2023.

The DMF estimates capital expenditure required for the investment will be at least 1.5 billion baht. If petroleum is found for commercial production, the budget may increase to over 10 billion baht.

The department believes the three new target areas have the potential to supply petroleum because they are located to the west of Erawan and Bongkot gas fields, the main sources of natural gas in Thailand.

The long delay in holding the new auction resulted from a mix of economic and political incidents, including the 2007-2009 global financial crisis, the 2009-2010 domestic political tensions, and calls on the government between 2014 and 2016 to change a petroleum law by adopting a production-sharing contract model when granting concessions to oil and gas operators.

The Covid-19 pandemic in 2020, which precipitated a global oil price collapse, was also factored in.

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