Thailand plans to offer new licences to explore for oil and gas this week for the first time in seven years, as the net oil importer seeks to offset declining supplies from fields in the Gulf of Thailand.
Securing new supplies is important for energy security because existing reserves in the gulf may last for only seven years, energy minister Narongchai Akrasanee was cited by Bloomberg as saying in an interview on Thursday. A list of potential investors may be complete by the end of the year, he said.
Thailand's natural gas resources are declining as an expansion of Southeast Asia's second-biggest economy increases demand and state energy subsidies encourage consumption. The country's proven natural gas reserves plunged 43% over the past decade to 8.41 trillion cubic feet, from 14.75 trillion in 2003, data from the Department of Mineral Fuels shows.
"Because of the much distorted prices, we have been dependent too much on natural gas to the point where we have to start importing more and more," Narongchai said in his office in Bangkok. "So we would want to produce or secure more supply from local sources by means of allowing a new round of exploration and production permits."
The government will offer concessions for 29 exploration areas offshore and in the central and northeast provinces, according to the Department of Mineral Fuels. Most will be onshore blocks in the northeast, close to Thailand's border with Laos, where recovery levels may be higher, Narongchai said.
The new concessions will be based on royalties rather than production-sharing, "because we don't know what we have," Narongchai said. "If you set conditions on production sharing somebody may not have any product for you to share."
Thailand, which relies on gas for most of its electricity generation, will also continue to secure more supplies from neighboring Myanmar. Natural gas from Myanmar accounts for 20% of total consumption, according to the Department of Mineral Fuels.
Thailand’s natural gas resources are declining as an expansion of Southeast Asia’s second-biggest economy increases demand and state energy subsidies encourage consumption. Thailand imported 85% of its crude oil use of 1 million barrels a day last year. It consumed 4.82 billion cubic feet per day of natural gas, with 20% coming from Myanmar and about 4% from imports of liquefied natural gas, according to government data. Natural gas from local sources totaled 3.66 billion cubic feet a day, equivalent to 76% of demand.
