Oil and gas firms active in Thailand will see their oil exploration options expand after the country's military-appointed assembly approved a change to its energy laws on Thursday.
Current laws mandate a monetary concession to Thai authorities to drill in local oil fields, but the amendment will allow companies to opt out of production sharing agreements (PSAs).
The Erawan gas concession, currently in Chevron's hands, and the Bangkot gas concession, which is in the control of government-run PTTEP Exploration and Production PCL, will both expire within the next six years.
The new measures are designed to make multinational energy companies an exciting investment opportunity before the two fields re-enter the market, according to Markets Insider.
The assembly also struck down a clause that would have led to the establishment of one national oil company. PTT Pcl, the energy company in which the Thai government is a majority shareholder, is the largest shareholder of PTTEP, but private investors have maintained control of the firm.
Members of the military-backed parliament ordered the setup of a new committee that would investigate potential models for a state-run energy company. The cabinet has 60 days to oblige to create the group and one year to complete the study.
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PTT said earlier this month that it sought investment opportunities for the $11 billion in cash and marketable securities it holds in order to make up for a decline in proven domestic oil and gas reserves to 695 million barrels in 2016. These reserves will only last for five years at current rates of production, according to analysts, which makes the situation close to critical.
Besides oil, PTT will also be looking for expansion opportunities in liquefied natural gas as demand in Thailand grows: Research and Markets has estimated that this demand is set for a compound annual growth rate of 7.2 percent for the period 2016 to 2025
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More