Concession bids winners head for the Cabinet 

Economy November 09, 2018 01:00

By   THE NATION

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THE MINISTRY of Energy will forward to the Cabinet the auction winners of Erawan and Bongkot petroleum concessions in the Gulf of Thailand next month, while planning to select state agencies or state enterprises to join in the investments with a 25 per cent stake in each field. 



Siri Jirapongphan, energy minister, said that Chevron Corp and PTT Exploration and Production Plc (PTTEP) passed the requirements on legal qualifications of petroleum operators, and have proposed the principles and conditions for state units to co-invest in the projects. They have also submitted plans for preparation, survey and petroleum development. 

The government will select state units with financial strength to join in the 10-year concessions given the investment in Erawan and Bongkot fields is worth about Bt1.1 trillion.

Under the condition, it is not limited for one state unit to hold a stake in the two fields or one state unit to hold a stake in one field and "we do not ask bidders to propose the list (of state units) but will offer all state units the opportunity for co-investment. “The state will consider all interested parties " Siri said.

In the Erawan concession, a joint bid from PTTEP Energy Development and its partner MP G2 (Thailand) Ltd faced a rival bid from Chevron Thailand Holdings Ltd and its partner Mitsui Oil Exploration Co Ltd.

Solo bid 

PTTEP Energy Development submitted a solo bid for the Bongkot concession to compete with a joint bid from Chevron Thailand Holdings and Mitsui Oil Exploration. Based on the selection criteria, 65 per cent of total score involves low gas price, 25 per cent for profit-sharing with the state, 5 per cent for bonus to the state and 5 per cent for employment of Thai workers. 

Earlier, the department of Mineral Fuels expected development of the Erawan and Bongkot fields will contribute about Bt800 billion to the state in the forms of royalty fees, petroleum income tax and profit sharing and emply 80 per cent of the workforce locally and at least 90 per cent in the fifth operation year. 

Moreover,  the current import volume of 22 million tonnes of liquefied petroleum gas worth about Bt460 billion will be reduced.

The Erawan gas block will expire on April 23, 2022, while Greater Bongkot North field |and Greater Bongkot South |concession will expire on April |24, 2022 and March 2023, respectively.

Based on the terms of reference, the Erawan gas field is required to produce 800 million cubic feet of natural gas a day and the Bongkot field is required to produce 700 million cubic feet daily for the first 10 years of the 20-year contracts which can be extended for another 10 years.