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TThhaaiillaannd d ‘‘PPoolliiccyy
Sungkom BunboonSungkom BunboonSurachai SirijirapatanaSurachai Sirijirapatana
Department of Mineral Fuels (DMF)Department of Mineral Fuels (DMF)
FRAMEWORK ON PROMOTING PETROLEUM E&PFRAMEWORK ON PROMOTING PETROLEUM E&P
TopicsTopicsIntroducing the organizationIntroducing the organizationThailandThailand’’s Petroleum Concession Systems Petroleum Concession System
-- Land RegimesLand Regimes-- Fiscal RegimeFiscal Regime-- Benefits and ObligationsBenefits and Obligations
ThailandThailand’’s Petroleum Situations Petroleum Situation-- Petroleum Field & ProductionPetroleum Field & Production-- Pipeline Systems & GSPPipeline Systems & GSP-- Gas Business in Thailand Gas Business in Thailand -- Thailand Petroleum BalanceThailand Petroleum Balance
1919th th -- Round Concession Bidding (2005)Round Concession Bidding (2005)Summary & ConclusionSummary & Conclusion
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National Energy PolicyNational Energy Policy
To conserve, develop, and promote the efficientconsumption of energy, while balancing with indigenous natural resources and the environment, with ultimate goal to reduce the degree of reliance of energy imports.
The actions shall, therefore, be implemented by:• To promote the appropriate proportion of energy
consumption mix, as well as to promote natural gas as the fuel of choices
• To provide support on renewable energy initiatives• To position energy pricing scheme as to increase
competitiveness and productivity of the real sector
MOEMOE’’ss VisionVision
Being an efficient agent in supplying Being an efficient agent in supplying energy to the nation, developing and energy to the nation, developing and administering energyadministering energy--related activities related activities for sustainable development of for sustainable development of national economy and societynational economy and society
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Department of Mineral FuelsDepartment of Mineral FuelsDirectorDirector--GeneralGeneral
Office of the SecretaryOffice of the Secretary
Bureau of Petroleum Operations Bureau of Petroleum Operations and Coordinationand Coordination
International Petroleum International Petroleum Operations DivisionOperations Division
Deputy DirectorDeputy Director--GeneralGeneralSenior ExpertSenior Expert
Management System Development UnitManagement System Development Unit
Bureau of Petroleum TechnologyBureau of Petroleum Technology
Petroleum Planning DivisionPetroleum Planning Division
ThailandThailand’’s Petroleum s Petroleum Concession SystemConcession System
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Petroleum ConcessionPetroleum Concession
Concession System = Exclusive rights and obligations for petroleum operation under given areas for a specific given time period
- Found Petroleum belongs to the State- Concessionaires shall invest and absorball incurred risks
- Benefits to the state in form of petroleumroyalties and taxes
Concession Contract
• General Contract Term– State maintains mineral right, through ‘first right of refusal’
– Operating company requires to set up office in Thailand
– Biddable exploration work obligation
– Bonuses and state participation are voluntary
– Exemption from customs duties on good imported for petroleum operations
– Employment and training of Thai personnel
• Petroleum Income Tax– 50% of Taxable Profit
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Thailand Petroleum Act
• Special Law to promote exploration and exploitation of petroleum resources
• Activities under jurisdiction include– Exploration– Production– Transportation– Sale & Disposal
Land Regimes
Exploration Block:defined as announced in Gazette
– Onshore Block: not exceed 4,000 km2
– Offshore Block: DMF specifies– Maximum of 5 blocks and total acreage not
exceed 20,000 km2
– Deep Water Acreages are exceptional
Exploration Period :Exploration Period :3+3 year exploration periods + 3 years extendable
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Land Regimes
• Start from the end of exploration period provided that the production area was established
• Production may start in Exploration Period
• Production License Application (PLA)– Demonstration of Commerciality of Petroleum Wells– Production Plan shall be submitted to DMF within 120
days of PLA approval– Details include; Estimated Budget, Calculation of the
Reserves, and Production Rate
Production Period :Production Period :20 years production period +10 years extendable
Fiscal Regime
• Royalty & Tax Regimes
• 2 Groups
o Thailand I Regime: 1971-1981
o Thailand II Regime: 1981-1989 (outdated)
o Thailand III Regime: Post 1989
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Fiscal Regime: Thailand I• Government Take:
– Royalty flat 12.5%– Petroleum Income Tax 50%
• Expense before tax:– Royalty on exported oil– OPEX– Depreciation
• 5-yr straight line for tangible assets• 10-yr straight line for intangible pre-production assets
– Loss carry forward 10 yr max.
• Deductions after tax:– Royalty on domestically consumed petroleum– No carry forward for excess royalty deduction
Fiscal Regime: Thailand III• Government Take:
– Royalty• Sliding scale rates from 5-15% on gross revenue, based on
production
– Petroleum Income Tax 50%– Special Remuneration Benefit (SRB)
• Progressive rate from 0-75% on “Windfall Profit”
• Expense before tax– Royalty– SRB– OPEX: allowable in full for current tax year– Depreciation
• 5-yr straight line for tangible assets• 10-yr straight line for intangible pre-production assets
– Loss carry forward 10 yr maximum
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Fiscal RegimeThailand I vs. Thailand IIIThailand I vs. Thailand III
• 12.5% Petroleum Royalty
• 50% Petroleum Income Tax
• Sliding Scale Rate Petroleum Royalty (5 – 15%)
• 50% Petroleum Income Tax
• Special Remuneratory Benefit (SRB)
Thailand I (1971Thailand I (1971--1981)1981)
Thailand III (Post 1989)Thailand III (Post 1989)
Effective Royalty RateP ro d u c tio n (B /D ) T h a ila n d I
R a te (% ) T h a ila n d III
R a te (% ) 1 ,0 0 0 1 2 .5 5 .0 0 2 ,5 0 0 1 2 .5 5 .2 5 5 ,0 0 0 1 2 .5 5 .7 5 7 5 0 0 1 2 .5 7 .1 7
1 0 ,0 0 0 1 2 .5 7 .8 8 1 5 ,0 0 0 1 2 .5 9 .4 2 2 0 ,0 0 0 1 2 .5 1 0 .1 9 2 5 ,0 0 0 1 2 .5 1 1 .1 5 3 0 ,0 0 0 1 2 .5 1 1 .7 9 3 5 ,0 0 0 1 2 .5 1 2 .2 5 3 8 ,0 0 0 1 2 .5 1 2 .5 0 4 0 ,0 0 0 1 2 .5 1 2 .5 9 5 0 ,0 0 0 1 2 .5 1 3 .0 8
1 0 0 ,0 0 0 1 2 .5 1 4 .0 4 1 5 0 ,0 0 0 1 2 .5 1 4 .3 6 2 0 0 ,0 0 0 1 2 .5 1 4 .5 2
1 0 0 ,0 0 0
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Benefits
• Importation of foreign skilled workers and specialists
• Import free of duty and taxes
• Exemption of Administration Taxes
• Right to retain, take and remit abroad of Foreign Currencies
Obligations
• Total Completion/Commitment of work and expenditure obligations
• Reports & Data from Petroleum Operations
• Utmost effort to:
– Employing National Contents
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Petroleum SituationPetroleum Situation
-- Petroleum Field & ProductionPetroleum Field & Production
-- Pipeline Systems & GSPPipeline Systems & GSP
-- Gas Business in ThailandGas Business in Thailand
-- Thailand Petroleum BalanceThailand Petroleum Balance
Petroleum Fields
TotalTotal 7979 4141
• Gas 51 19onshore 2 1offshore 49 18
• Oil 28 22onshore 19 19offshore 9 3
Discovered Production
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SirikitSirikit
Bung Bung YaYa
WichienWichien BuriBuri
UU--ThongThong
KamphaengKamphaeng SaenSaen
Nam Nam PhongPhong
LAOS
T H A I L A N D
CHAI PRAKARN
KAMPHAENG SAEN (P)
U-THONG (P)
WICHIAN BURISRI THEP
PHU HORM
DONG MUN
NAM PHONG (P)
BUNG MUANG (P)
PRATU TAO (P)WAT TAENPRU KRATHIAM (P)SIRIKIT (P)
MAE SOON (P)SAN SAI (P)
CHIANG MAI
NAKHON RATCHASIMA
PONG NOK (P)
NONG TUM
SIRIKIT WEST (P)BUNG YA (P)
THAP RAT (P)
April 2005
PTTEP-SiamOil 16,817 BPDGas 54 MMscfdSino-U.S.Oil 1,101 BPD
Pacific TigerOil 169 BPD
PTTEP InterOil 483 BPD
EXXON MobilGas 33 MMscfd
DEFENCE ENERGY DEPARTMENT(DED)Oil 754 BPD
Onshore ProductionOil 19,324 BPD Gas 87 MMscfd
SONGKHLASONGKHLA
SONGKHLA
BUA BAN
JDA
PAILIN
L-STRUCTURE
NANG NUAN (P)KAPHONG (P)PLATONG (P)
TRATSATUN (P)JAKRAWAN (P)FUNAN (P)
BAANPOT (P)ERAWAN (P)
DARAPAKARANG
SURAT (P)PLADANG
GOMINMORAKOT
TANTAWAN
BONGKOT (P)UBON
BenchamasBenchamasNangNang NuanNuan
BongkotBongkot
ErawanErawanGroupGroup
Gas 1,982 MMscfdCondensate 64,768 BPDOil 74, 298 BPD
Chevron OffshoreGas 228 MMscfdOil 50,847 BPD
PTTEP Inter (Bong kot)Gas 342 MMscfdCondensate 10,108 BPD
Unocal (Pilin)Gas 437 MMscfdCondensate 21,090 BPD
Unocal (Erawan)Gas 976 MMscfdCondensate 33,570 BPDOil 23,451 BPD
April 2005
OFFSHORE PRODUCTION
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JDA PRODUCTION
c
Muda
Amarit
Tapi
Mali
BumiEast
BumiCakerawala
Bulan
Suriya
JengkaWest
Jengka
Jengka South
MudaSouth
Samudra
Wira
Senja
SamudraNorth
JengkaEast
THAILAND
MALAYSIA
JDA
JOINT DEVELOPMENT AREAN
S
EWB-17-01
A-18
B-17
0 20 km.
Cakerawala Field
• JDA Area : 7,250 Km2• PSC 50:50• Plan 390 MMscfd 20 yrs.
Cakerawala Field- CTOC - Started Prod.: 2 Jan.05- Gas 114 MMscfd
Condy 2,000 BBLD-- Songkhla Separated gas Plant: end 2005
เขตพื้นท่ีทบัซอนไทย-เวียดนาม-มาเลเซีย
MTJA PSCGross Revenue
Research Cess0.5%
Royalty10%
Cost Recovery50%
Profit Share
Government50%
Contractor50%
Income Tax0-20%
Less MTJAExpense
MalaysiaThailand
Split50:50
Tax holiday on the first 8 years
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Pipeline Systems & GSP• Existing System
• Offshore P/L
– Erawan to Rayong 2,000 mmscfd
– Erawan to Kanom 350 mmscfd
• Onshore P/L
– Rayong to BPK 1,270 mmscfd
– BPK to WN 860 mmscfd
– BPK to S.BKK 306 mmscfd
– Myanmar 1,100 mmscfd
– Rat-WN 400 mmscfd
• Gas Separation Plant
– No. 1-3 @ Rayong 950 mmscfd
– No. 4 @ Kanom 230 mmscfd
YADANA
BONGKOT
PLATONG
YETAGUN
BENCHAMASTANTAWAN
PAILIN
JDA
ERAWAN
RAYONG
Existing Network
Future Extensions
BPK
WNS.BKK
KANOM
RATBURI
NAMPONG
Gas Business in ThailandGas Business in Thailand
Gas Sale Agreements PTT & PRODUCER
Gas Supply Agreements
Unocal + Moeco
PTTEP + Total
Chevron
EGAT
SPP
Industrial
Oversea : Mynmar
PTT
PIPELINE & GSP
PRODUCER CUSTOMER
IPP
EGCO
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GSA = Take-or-Pay Basis ( 25-30 Years)- Time of GSA
CDD RIP Contract Year
- Gas Quantity Reserves DCQ ACQ CDC Take-or-Pay
- Price & Price adjustment formula IBP AY, BY, CY, DY Index -Iy, Fy, Ey, Wy, OMy,
I, F, E, W, OM
- Gas QualityContract Delivery Pressure Gas Specfication
- - Another factor
Sale Gas AgreementSale Gas Agreement
Present GSAPresent GSA
Unocal Unocal PTTEP Unocal Chevron PTTEP-Siam Exxon-Mobil
Case Thailand I Thailand I Thailand I Thailand I
GOT
1999
Thailand III Thailand I Thailand I
Location GOT GOT GOT GOT NC NE
Started Prod. 1981 1984 1993 1997 1983 1990
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Base price & Price adjustment formula
Cost plusEnergy Parity
Comparable FuelInflation IndicesExchange Rate
• Unocal I (Every year of July)• Unocal II & III (Every year of October)
• Bong Kot (April & October)• Chevron (April & October)
• Unocal IV (Every year of October)
• PTTEP-Siam (January & July)• Exxon-Mobil (Every month)
Sale Gas AgreementSale Gas Agreement
Basic Price adjustment formula (Offshore)Formula (1) -InflationFormula (2) -Ratio in Price formulaFormula (3) -Time Lag
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Onshore Gas Price Formula Onshore Gas Price Formula
- Normal Price - Decrease due to Disel price & Reserve
- Floor Price- Special Floor Price
• Permanent Pipeline Sale - Proved > 0.8 TCF, FR > 1 TCF)
• Associated Gas - PTTEP-Siam sale Directly to EGAT
Thailand Petroleum BalanceJan.-Mar. 2005
Crude Oil 835.6
Oil Product 35
Gas 148
1,018.611,018.61ImportImport
TotalTotal 1,551.311,551.31
1,188.81,188.8
Gas 440.5
Oil Product 748.3
DomesticDomestic
151.50151.50
ExportExportOil Product 97.9Crude Oilบ 53.6
Unit MBOED
DomesticDomesticCondy58.5
Oil 91.2
Gas383
532.7532.7
35% of Procurement
48% of Domestic Consumption
35%
65%
5 Gas Separate Plants
1,225 MMSCFD
8 RefineriesTotal Capacity
1,025,000 BBLD
ProcurementProcurement
ConsumptionConsumption
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25-years Gas Demand and Supply Plan
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
MTJDA B-17
MTJDA A-18
Arthit
Chevron
Bongkot
Pailin
Unocal 123
Yetagun
Yadana
NP/PH
Demand
Demand Growth 3.0% pa.
NP/PHYadana
Yetagun
Unocal 123
Pailin
BongkotChevronArthit
JDA A-18
JDA B-17
Growth
Maintain
Based on DMF Reserves (3P), as of Dec 31, 2003.Excluded S1 gas.
ENER
GY,
Bbt
u/d.
Demand Growth 5.0% pa.
Natural Gas DemandNatural Gas Demand--Supply OutlookSupply Outlook
Unit : MMSCFD@1,000 BTU/SCF
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1999 2001 2003 2005 2007 2009 2011 2013 2015
POWERPOWER
INDUSTRYINDUSTRYGSPGSP
2%8%0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1999 2001 2003 2005 2007 2009 2011 2013 2015
DOMESTIC COMMITTMENTDOMESTIC COMMITTMENT
IMPORT COMMITTMENTIMPORT COMMITTMENT
NEW FIELDSNEW FIELDSSWINGSWING
15%
Unit : MMSCFD@1,000 BTU/SCF
2%8%15%
CAGR = 5%CAGR = 5%
Natural Gas Demand OutlookNatural Gas Demand Outlook Natural Gas Supply OutlookNatural Gas Supply Outlook
Source : PTT
Replace CoalReplace Coal
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The 19The 19thth--RoundRound
Concessions BiddingConcessions Bidding
(2005)(2005)
Upstream Promotion
The 19th bidding roundThe 19th bidding round
(2005)(2005)82 blocks covering 440,704 km2
Area(Km2) # Blocks Total
(Km2)
Onshore 4,000 64 234,297
GoT 20,000 12 85,847
Offshore 20,000 6 120,560
ANDAMAN AREAANDAMAN AREA
GULF AREAGULF AREA
NN--CENTRAL AREACENTRAL AREA
NE AREANE AREA
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Summary & Conclusion- Thailand : Concession /PSC (JDA) system
- Petroleum fields :Tertiary Basin (main)(others in Permian carbonate)
Onshore : 6 Oil Fields 23,000-24,000 bpd2 Gas Fields 97-100 mmscfd
Offshore : Oil 81,244bpdGas 2,070 mmscfdCondy 65,000 bpd
- Thailand Petroleum Balance : Domestic 35 %Import 65 %
- Thailand : 19 th Bidding round (2005)
L4
Thank You Very MuchMore About DMF?More About DMF?
Visit: www.dmf.go.th
Department of Mineral FuelsDepartment of Mineral FuelsShinawatraShinawatra Tower 3,24Tower 3,24--26 Floor, 26 Floor, ViphavadirangsitViphavadirangsit Rd, Rd, ChatuchakChatuchakBangkok 10400, THAILANDBangkok 10400, THAILANDTel. 66Tel. 66-- 22--791791--83008300Fax. 66Fax. 66--22--791791--83578357