Nation Thailand
Cabinet asked to ease levy for Andaman gas exploration
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The Energy Ministry has asked the Cabinet to consider reducing a special levy on the successful bidder for a deep-water petroleum block in the Andaman Sea, as Thailand seeks new domestic gas supplies to offset declining production from the Gulf of Th
Key facts
- An Energy Ministry source said the proposed incentive would apply to the 26th petroleum exploration and production bidding round, which the Department of Mineral Fuels (DMF) plans to open in the southern Andaman Sea within 2026.
- The country already relies heavily on imported energy, bringing in around 90% of its crude oil requirements and meeting about 46% of its natural gas demand through liquefied natural gas imports.
- Under Thailand’s petroleum law and the progressive fiscal regime known as Thailand III, concessionaires may be required to pay the state an SRB equal to between 0% and 75% of revenue, depending on a project’s profitability.
- The cost of drilling a single exploration well in the proposed block could reach US$27 million, or almost 1 billion baht.
- Thailand’s proved natural gas reserves, known as 1P reserves, were estimated at the end of 2025 to be sufficient for only another 4.6 years, according to DMF data
- The DMF expects to announce the invitation and open applications for exploration and production rights before the end of 2026.
Summary
An Energy Ministry source said the proposed incentive would apply to the 26th petroleum exploration and production bidding round, which the Department of Mineral Fuels (DMF) plans to open in the southern Andaman Sea within 2026.
Thailand’s proved natural gas reserves, known as 1P reserves, were estimated at the end of 2025 to be sufficient for only another 4.6 years, according to DMF data. Proved and probable reserves, or 2P reserves, would extend the estimated remaining period to 8.6 years.