The bidding for the Erawan and Bongkot petroleum blocks in the Gulf of Thailand may be delayed further, from next March to the second quarter of 2017, says Energy Minister Anantaporn Kanjanarat.
The Energy Ministry had aimed for the new auction of gas fields to take place in the first quarter of next year.
Gen Anantaporn said the potential delay stems from complications with the amended Petroleum Act. He did not elaborate.
But energy experts who declined to be named said there is no problem with the revised Petroleum Act. They pointed instead to the Petroleum Committee, which remains reluctant to select a method of benefit sharing.
"They have not yet decided which method will better benefit Thailand in the long term, and it's not an easy task because no one knows for sure which one is better," said an energy expert. "But what they know for sure is that activists are ready to attack them if the committee makes any decision that contradicts their demands."
The revised Petroleum Act offered hope for a solution to the conflict between the energy industry and activists over the appropriate formula for sharing benefits from the petroleum fields.
The cabinet and the National Legislative Assembly (NLA) since June have considered the amendment to the Petroleum Act, which would introduce two new structures for oil and gas development in Thailand.
Also, under the current version of the law, before the bidding gets under way, the Petroleum Committee has to choose between the production sharing contract system or a service contract system as the business model for the concession system.
Once the committee has decided which model is most beneficial they have to propose to the NLA to consider the final amendments to the Petroleum Act.
"If things go as planned, the principles and conditions for the auction are expected to be finalised by December after an appraisal of the costs for decommissioning the petroleum rigs," an energy expert said.
The decommissioning cost is estimated at US$7 billion.
If the auction can kick off in June of next year, the Petroleum Committee, which is tasked with overseeing the process, is expected to spend some time reviewing each applicants' proposal. Bidding results are expected to be announced by next September.
The concession for the Erawan block (B10-B13), now operated by Chevron Offshore Exploration and Production, is scheduled to expire in 2022. The concession for the Bongkot block (B15-B17), operated by PTT Exploration and Production Plc, is set to expire in 2023.
The Erawan block now produces an average of 1,240 million standard cubic feet per day (MMSCFD) of gas, while the Bongkot block produces 840 MMSCFD. The country's daily gas demand, by contrast, is 4,300 MMSCFD.
However, the two operators have been asked to maintain production volume before the auction is open in March next year to prevent disruptions to power plants' operations.