You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

Search
Close this search box.
August 19, 2020

PTIT Focus: Thailand Allocates Petroleum Exploration Blocks for 23rd Round of Bidding

Subscribe to Updates
Petroleum Institute of Thailand: PTIT Focus

On March 2, 2020, the Department of Mineral Fuels (DMF) issued its Notification Re: the Determination of Exploration Blocks for the Bidding for Petroleum Exploration and Production B.E. 2563 (2020). This notification, which repeals the Notification of the Department of Mineral Fuels Re: the Determination of Exploration Blocks for the Bidding for Petroleum Exploration and Production B.E. 2561 (2018), allocates the areas to be used as exploration blocks for the 23rd round of bidding for petroleum and exploration production. The three new exploration blocks, located in the Gulf of Thailand, are as follows:

  • Block G1/63, covering 8,197 km2
  • Block G2/63, covering 15,030 km2
  • Block G3/63, covering 11,646 km2 (divided into Areas A and B)

In total, the exploration blocks set by the DMF cover 34,873 square kilometers—a larger geographical area than allocated in prior petroleum exploration and production.

The bidding process for petroleum exploration and production in the three exploration blocks is expected to begin in early April 2020 with the DMF’s anticipated release of the terms of reference. In order to participate in the bidding process, private companies must first meet the requirements stipulated in the terms of reference and must have paid the participation fee. Companies may then submit their applications and related proposals, along with payment of the application fee and deposit of a bid bond. It is expected that private companies will have a few months to prepare their bids once the DMF announces the terms of reference.

Though the terms of reference have not yet been disclosed, the contract governing the three blocks is expected to be under the production sharing contracts (PSC) scheme. The Ministerial Regulation Prescribing the Form for Production Sharing Contracts B.E. 2561 (2018) sets out a model template for PSCs to be used for this exploration and production.

Interested parties should watch for the DMF to issue their final decision regarding the result of the bidding and the execution of the contracts within the first quarter of 2021.

 

This article first appeared in the November 2019 edition of PTIT Focus, the Petroleum Institute of Thailand’s monthly newsletter. The article was published in both English and Thai. 

Related Professionals

Industries

Energy

Location

RELATED INSIGHTS​

December 4, 2024
Thailand Legal Basics, a valuable primer for foreign investors, explores all aspects of living and doing business in Thailand. Written by specialists at Tilleke & Gibbins in Bangkok, it is the only comprehensive English-language guide to the Thai legal system with a focus on the concerns of foreign business and investment.
Read More
August 12, 2024
With the growing prominence of ESG (Environmental, Social, and Governance) factors, businesses in Vietnam are increasingly recognizing their importance in driving global demand, societal impact, and economic value. A comprehensive acknowledgment of ESG-related legal requirements is critical for investors and companies operating in Vietnam to meet stakeholder expectations and ensure compliance. Our guide provides a basic overview of the rapidly evolving ESG landscape in Vietnam, covering a range of key issues for companies doing business in the country: What is ESG, and what does the ESG legal framework look like in Vietnam? Who needs to follow ESG regulations in Vietnam? What are the benefits of ESG compliance? How can enterprises enhance ESG best practices in Vietnam? Please click on the link below to view the full article.
Read More
June 6, 2024
On January 18, 2024, Vietnam’s National Assembly passed a new Land Law (“Land Law 2024”) that is scheduled to take effect on January 1, 2025, replacing the current Land Law 2013. To mitigate challenges faced by the real estate market, in late May 2024, the government proposed amendments to the Land Law that would move the effective date up five months, to August 1, 2024, pending approval by the National Assembly. One of the key sectors to be impacted by the Land Law 2024 is the energy sector, which requires large land areas for power plants and infrastructure, especially given Vietnam’s 2050 net zero emissions commitment. Below are highlights of how the new Land Law 2024 will affect Vietnam’s energy sector. Annual payment of land rental Under the Land Law 2013, investors implementing energy projects (e.g., solar power projects) are entitled to choose to lease land with either (i) an annual rental payment or (ii) a single upfront payment for the entire term of use. Under the Land Law 2024, these investors are only allowed to use land in the form of an annual rental payment. As the annual land rental is calculated in five-year cycles, based on the land price table decided by the state, this new restriction means that investors in energy projects will face an additional risk of a sudden increase in land rental, disrupting their financial planning. Investors using land sites leased with annual rental payments are also not allowed to mortgage their land-use rights, but can only mortgage assets attached to the land, at credit institutions licensed to operate in Vietnam. Accordingly, this may affect the ability of energy projects to obtain financing during the development stage, because they no longer have assets that can be mortgaged. Obtaining land Under the Land Law 2024,
Read More
June 4, 2024
Thailand’s Department of Mineral Fuels (DMF) is in the process of preparing a notification that will open the application period for onshore petroleum exploration and production rights in the country’s 25th bidding round. The 25th round of bidding will cover nine petroleum blocks, including the northeastern areas (blocks L1/66, L2/66, L3/66, L4/66, L5/66, L7/66, and L9/66) and central areas (blocks L6/66 and L8/66). The DMF estimates that application submissions will commence around the middle of 2024, and the successful bidder will be announced at the end of the same year. Based on previous rounds of bidding, applicants must meet the following key criteria: The applicant is a company with the purpose of carrying out petroleum exploration and production; The applicant commands the necessary assets, machinery, equipment, tools, and specialists to explore for, produce, sell, and dispose of petroleum; The applicant has not abandoned its operations under a concession or been subject to revocation of a concession in Thailand; and None of its personnel, shareholders, directors, or authorized directors is listed as a person who has abandoned its operations under a concession, or has been subject to revocation of a concession in Thailand. If the applicant does not itself possess all the qualifications under (2) above, it must have another government-approved company that possesses all the qualifications under (2) and has a capital or management relationship with the applicant, and the applicant must supply guarantees that the company will make available to the applicant all necessary assets, machinery, equipment, tools, and specialists for the applicant to explore for, produce, sell, and dispose of petroleum. Companies with a vested interest in petroleum exploration and production in Thailand must remain vigilant for updates. The DMF is expected to provide an update and more details on the bidding very soon. For more details
Read More

Contact

We have seven offices in six countries
across Southeast Asia.

Contact Us

Careers

We are always seeking great people to grow
our amazing team.

Join Us

Networks

© 2024 Tilleke & Gibbins International Ltd. All rights reserved.

© 2020 Tilleke & Gibbins International Ltd. All rights reserved.

Privacy Policy

| Fraudulent Communications

| Legal Notice