Gulf talks with Cambodia and oil-concession bids pushed back

September 3, 2012
WATCHARAPONG THONGRUNG
THE NATION

Two items on the government's energy agenda - preparations for talks with Cambodia on a solution to the countries' overlapping claims in the Gulf of Thailand and the plan to open a 21st round of bidding for petroleum exploration and production concessions - are likely to be delayed until next year.

The government had planned to finish its preparations for the negotiations next month and send them to the Cabinet and Parliament for approval. However, completion of the preparations might be postponed until next year, as the government does not want to run the risk of the opposition raising the issues in the upcoming censure debate, an Energy Ministry source said.

Songpope Polachan, director-general of the Department of Mineral Fuels, said both countries would benefit from the development of natural gas fields in the overlapping 26,000 square-kilometre area if they can solve the problem quickly.

The department has proposed that the solution be based on a Memorandum of Understanding signed by the two countries last year that the bilateral negotiations will be divided into two parts. The first stage of the talks would cover the upper part of the overlapping area, in which the military and national security agencies would be responsible for negotiations. These talks would use demarcation principles to divide the area.

For the overlapped areas, the Joint Development Area (JDA) basis would be used.

If the negotiations lead to collaboration and exploration, this will help increase Thailand's natural gas reserve by 30 per cent.

In a separate matter, the department will delay its launch of the 21st round of bidding for petroleum exploration and production concessions to next year from September, as Myanmar will launch its petroleum concession bid in November. Myanmar's petroleum fields have higher potential and are more attractive to bidders than those offered by Thailand. If the department and Myanmar launch the bid at a similar time, the department is concerned its concessions might fail to attract bidders.

The 21st bidding round features 22 plots, of which 11 are in the Northeast, six are in the North, and the rest are in the Gulf of Thailand. The total area is 46,000 sq km. According to the department's preliminary estimate, the area could contain between 3 trillion and 5 trillion cubic feet of natural gas and 5 million to 10 million barrels of crude oil.