Thailand offers two offshore blocks under first ever PSC regime

Bongkot field (Image source: PTTEP)

Thailand has launched a bidding round offering the G1/61 and G2/62 offshore blocks under a production sharing contract (PSC) regime for the first time in the country’s history.

These blocks cover the producing Erawan and Bongkot gas developments, operated by Chevron and PTTEP, respectively.

Following the Thai government’s recent announcement revealing details on Bongkot and Erawan offshore blocks auction, Wood Mackenzie research director, Andrew Harwood, noted that the fields currently produce a combined 2.2 bcfd, accounting for 70 percent of Thailand’s domestic gas production, but the existing concessions expire in 2022.

According to Harwood, the interested parties will need to move fast to pre-qualify by the initial deadline of May 28, but qualifying bidders will then have until September 25 to submit their bid. Successful parties are scheduled to be announced in the first quarter of 2019.

The two blocks are being offered under a PSC regime. This is the first time Thailand offered this type of contract.

Harwood said that key biddable elements of the auction round were gas production, gas price, and production share attributable to the government. Bidders must commit to a minimum production of 800 mmcfd for G1/61 (Erawan) and 700 mmcfd for G2/62 (Bongkot) for a period of ten years from the PSC start date.

“We estimate the maximum gas price available, derived from the government’s formula and indexed to Dubai crude, will be set at US$7.5/mcf in 2022, assuming a Dubai crude price of US$68/bbl in 2022. The minimum government production share is set at 50%. Signature and production bonuses will also be biddable.

“In order to achieve the ambitious production targets, we estimate the successful bidders will need to spend US$11 billion and US$6.4 billion for G1/61 and G2/61 respectively from 2020, excluding decommissioning costs. This would involve the development of over six tcf of gas resources,” the research director said.

Also, when developing bid strategies, interested parties need to consider decommissioning, resource risk, and Thailand’s political environment – all uncertainties that could impact the value of the projects.

The existing participants – Chevron, PTTEP, MOECO, and Total – were, Harwood said, well placed to bid, given their existing experience of the projects, but there is likely to be interest from other players in Thailand such as Mubadala, CNOOC, or Petronas.

“The bidding round represents another opportunity to acquire producing discovered resources in an already crowded global market. Thailand is, therefore, competing for investment with larger opportunities in Latin America and the Middle East,” he concluded.

It is worth reminding that Shell sold its interest in the Bongkot field to state-owned oil company PTTEP for $750 million back in January 2018.

Share this article

Follow Offshore Energy Today


<< Jan 2020 >>
30 31 1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31 1 2

Africa Oil Week 2020

For over 25 years Africa Oil Week has been the meeting place for Africa’s most senior E&P stakeholders.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >


The development of consensus standards is one of API’s oldest and most successful programs.

read more >


Looking to fill a job opening?

By advertising your job here, on the homepage of, you'll reach countless professionals in the sector. For more information, click below...


Looking to fill a job opening?

By advertising your job here, on the homepage of, you'll reach countless professionals in the sector. For more information, click below...