New incentives in energy field

The government plans to amend the Petroleum Act to expand investment opportunities in the energy sector, including electricity generation, according to Prime Minister Surayud Chulanont. ''Invitations for investment in new independent power producers (IPP) will be announced around March, calling for some 400 billion baht in fresh investment in power generation,'' he said yesterday.

Other priorities, he said, included improving logistics networks, water resource management and trade infrastructure with neighbouring countries.

According to Krairit Nilkuha, director-general of the Department of Mineral Fuels, the amendments to the Petroleum Act of 1971 would focus on granting a 90% reduction of royalty fees on unproductive petroleum concessions.

The cut, he said, could help improve the commercial viability of existing fields where hydrocarbon reserves were going to run out or profits from existing investments were no longer attractive.

Under the existing law, holders pay royalty fees of 12.5% of the petroleum value they produce for concessions awarded before 1989, and 5% to 15% for concessions granted after 1989.

Mr Krairit said the aim was to maximise the benefits from petroleum exploration, deal with rising fuel prices and improve the investment climate.

The 19th round of bids last year featured 25 concessions, with 20 awarded to date. The 20th round is expected to be announced around mid-year with 60 concessions to be offered.

General News
Bangkok Post
Thursday January 25, 2007