Auctions today for gas fields worth billions

Economy September 25, 2018 01:00

By THE NATION

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Auctions were scheduled for today on concessions for the Erawan and Bongkot offshore natural gas fields, Energy Minister Siri Jirapongphan said yesterday.



The fields have a combined output topping 70 per cent of all Gulf of Thailand output, he said. Chevron Corp operates the Erawan field and state-owned PTT Exploration and Production Plc runs the Bongkot field under licences set to expire in 2022 and 2023, respectively.

Neither operator is able to extend its concession. 

Based on the original work plan, replacements must be found five years before the concessions expire.

With roughly three years to go, some 287 potential platforms must be selected and delivered to the new operators in 2021.

If the process were delayed, the fields’ assets might not be delivered to the new operators as planned. Today is the deadline for receiving proposals. 

The auctions will utilise a formal production-sharing contract (PSC).

The government is expected to earn about Bt800 billion in royalty fees, petroleum tax revenue and shared profit from both gas fields. As per a condition in the terms of reference, 80 per cent of the jobs will go to Thais in the first operating year and at least 90 per cent in the fifth year.

Opening the fields is expected to reduce Thai imports of liquefied petroleum gas (LPG) by about 22 million tonnes, worth some Bt460 billion. It’s expected the projects will generate investment worth about Bt1.2 trillion domestically.

Qualified bidders are required to submit operating plans, investment budgets, technical proposals and returns to the government. 

They must detail their legal qualifications, accept 25 per cent public participation, technical proposals and returns to the public sector.

The bids will be considered for two months and the decision announced to the Petroleum Committee in late November.