Thailand’s military government will delay bidding for new oil and gas concessions indefinitely, pending an amendment to a petroleum law, Prime Minister Prayuth Chan-ocha said on Tuesday.
The announcement comes amid opposition to contract terms that have drawn the interest of several international companies, including the Thai units of China National Petroleum Corporation (CNPC) and Japan’s Mitsui & Co Ltd.
The government told a public forum last week it was considering a vote on whether to proceed with the auction of oil and gas blocks following criticism from several senior politicians. Former Prime Minister Abhisit Vejjajiva, as well as political activists, want the government to ensure that Thailand gets a bigger cut of profits from the concessions.
“We have delayed the bidding in order to amend the petroleum law,” Prayuth said, adding that it would probably take about three months to get a final version of the petroleum law.
He gave no further details.
Critics are pushing for production-sharing contracts similar to those offered by neighbouring Southeast Asian countries, including Indonesia, Vietnam and Malaysia, where the state cut of earnings is around 74 percent on average, according to energy consultancy Wood Mackenzie.
Thailand, under existing concession law, receives taxes and royalties equivalent of around 67 percent on pre-tax profits.
The government had offered 23 onshore blocks and six offshore blocks in the Gulf of Thailand.
The 29 blocks hold reserves estimated at between 1 trillion and 5 trillion cubic feet of gas and 20 million to 50 million barrels of crude, according to Thailand’s Energy Ministry.
The auction was originally planned for 2011, but was delayed due to devastating floods that year and then a political crisis that began in late 2013 and culminated in a May coup last year.