On March 2, 2020, the Department of Mineral Fuels (DMF) issued Notification Re: the Determination of Exploration Blocks for the Bidding for Petroleum Exploration and Production Concessions B.E. 2563 (2020). This notification, which repeals Notification of the Department of Mineral Fuels Re: the Determination of Exploration Blocks for the Bidding for Petroleum Exploration and Production Concessions B.E. 2561 (2018), allocates the areas to be used as exploration blocks for the 23rd round of bidding for petroleum and exploration production concessions. 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; and
- 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 concessions.
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 by bidders.
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.
For more details on the DMF notification, the bidding process, or on any other aspect of oil and gas law in Thailand, please contact Tilleke & Gibbins at [email protected] or +66 2056 5555.