The search for hydrocarbons in Thailand began in 1921 in
the Fang Basin in northern Thailand where oil seeps had
been reported. Prior to the start of World War II a number
of shallow wells were drilled in the area by various
government organizations in an effort to exploit tar
sands. Immediately after the war the Department of Mines
was given the responsibility of exploration.
In 1954 Thailand changed its policy of petroleum
exploration by allowing private sectors to be involved.
The same year Hunting Geophysics of London undertook
aeromagnetic work in the Chao Phraya area and the
country’s first oil discovery was made at Chai Prakan in
the Fang Basin by the Department of Mines.
In 1956 the responsibility of exploration in
Fang Basin was given to the Department of Energy Defense
(DED). It soon signed a contract with the Refining
Associated Co., Ltd., to construct a small refinery with a
1,000 BOPD capacity.
Union Oil (which later became Unocal) was
granted exploration rights to the Khorat Plateau in 1962
but did not initiate serious exploration work due to lack
of a specific petroleum law. Raphael Pumpelly was also
awarded a permit in an adjacent area at around the same
time and the Gulf area around Bangkok where it drilled
some stratigraphic wells.
In 1964 a large number of foreign companies
applied for offshore exploration rights, although it was
not until September 1967 that six companies were informed
that they were to be awarded 17 blocks in the Gulf of
Thailand. This Petroleum Act became known as Thailand I.
Thus following the 1st Licensing Round,
offshore blocks were awarded to Tenneco, Gulf, Conoco,
Amoco, Union, BP, Triton and Pan Ocean. Union and Meridian
were also awarded blocks on the Khorat Plateau at the same
Union drilled the first deep well (and the first bt a
private company) on the Khorat Plateau (Kuchinarai – 1)
and Conoco the first offshore well (Surat – 1). However,
both exploration wells failed to encounter hydrocarbons.
The first discovery in the offshore area was made by Union
at 12-1 in its B12 concession in the Pattani Basin in
January 1973. The discovery was later named Erawan, after
the three headed elephant in the Thai folklore. This was
followed by a number of other discoveries made in blocks
awarded during the 1st Licensing Round. One of
the most important was made by Tenneco in B15 in the Malay
Basin in May 1973, when wildcat 15-B-1X was abandoned as
an oil and gas well. Although not originally thought to be
large, later drilling by BP and Texas Pacific confirmed
the presence of a sizable gas accumulation, which
subsequently became known as the “B” structure. This field
is currently operated by Total as the Bongkot Field and
production rates are highly impressive.
Licensing rounds held in 1972 and 1974 saw the awarding of
blocks in the Andaman Sea. Amoco and Pan Ocean were
granted concessions there in the 1st Licensing
Round and later joined by Lewis Weeks Associated, Esso
Oceanic and Union. In 1975 Sun Oil took over the
operatorship of Gulf’s three blocks in the Gulf of
Thailand and the following year Conoco transferred its
rights in two concessions to Union.
In 1978 Union signed a sales contract to supply gas to the
domestic market, and the development of the Erawan Field
began immediately thereafter, with production commencing
in August 1981. Further fields were subsequently brought
on stream in the following years by the same operator.
Shell and Esso were granted large blocks in the
Phitsanulok Basin and Khorat Plateau, respectively in
1979, as a result of the 6th Round. Both
companies had immediate success when in 1981 Esso
discovered the Nam Phong gas field and Shell the Sirikit
(or Lan Krabu) oil and gas field. An immediate rush for
onshore acreage followed, with Esso increasing its Khorat
holdings and other blocks being awarded to Terra Marine,
Phillips, MGF, Bass Strait, BP, Britoil, Southwest
Consolidated Resources and Gopher in rounds held between
1980 and 1985. A number of successful wells were drilled
in the 1980s on this acreage. Some of it is still held
under license although participating companies have
Due to high global oil prices in the early 1980s
a new fiscal regime, Thailand II, was introduced in 1982.
The new regime introduced 20% limit cost recovery of
annual gross revenue and increased royalty corresponding
with an increase in production rate. However, due to a
slump in oil prices in 1985 Thailand II had a very short
life as it was designed for medium and large size fields.
The early 1980s saw the entry of a number of new
companies into the offshore area as a result of acreage
being made available due to partial and total
relinquishments. These include Pecten, Placid, Shell,
Brioil and Premier.
In June 1987 Shell made the first substantial
oil discovery in the Gulf at Nang Nuan –1 in B6/27. The
field, located in the Chumphon Basin, was first brought
onstream in January 1988 and is currently Thailand’s only
offshore oil producing field.
British independent Premier Consolidated made an
oil discovery at Songkhla – 1 in B11/27 in November 1988.
The discovery was the first made in the Songkhla Basin
and this was followed by the discovery of oil at Bua Ban –
1 in the same basin in April 1990. Although these fields
are not large, their favorable location near the coast
makes development in the near future a possibility.
fiscal regime, Thailand III, became effective in 1989.
This was introduced for the 13th Licensing
Round. One of the main changes was the revision of the
royalty rate to a sliding scale to enable commercial
production for all sizes of fields. The three
concessionaires who were under Thailand II terms
successfully applied to be under Thailand III, while those
from Thailand I were willing to stay with the old terms.
In 2000, Thailand’s petroleum exploration
activities were active onshore and offshore both in the
Gulf of Thailand and the Andaman Sea where there had been
no petroleum drilling for a decade. Unocal Andaman drilled
five exploratory well in block W9/38, however only small
trace of gas was found in Kantang-1A well.
To the end of 2001, the total number of wells drilled in
Thailand was 2,970, comprising of 454 exploratory, 424
appraisal, 2,001 development wells. Since 1971, a total
of 17 rounds of concession bidding have been completed and
25 concessions were awarded. Current major operators are
Unocal, Chevron, PTTEP, ThaiShell and ESSO. Over-21 fields
are producing hydrocarbon and several development projects
proved petroleum reserves as of December 31, 2001 are 12.3
Tcf for gas, 250.4 MMbbl for condensate and 313.0 MMbbl
At the end of 2001, 110 petroleum production
areas were granted to concessionaires. 25 areas were
granted onshore area, 23 for oilfield and only 2 for
gasfield (Nam Phong and Phu Horm-1). In the Gulf of
Thailand 85 production areas were approved. Most of them
are gas and condensate fields operated by Unocal and PTTEP
while Chevron holds gas, condensate and oil fields.