|
Nature
of right: |
Concession
agreement signed with Ministry of Industry (formerly Ministry of
National Development). |
|
Management responsibility: |
Company, subject to
plans approved by Department of Mineral Resources. |
|
Area of
blocks, onshore: |
10,000
sq. km., maximum 5 blocks. |
|
Duration: |
|
Exploration Period |
8 years +
4-year renewal period. |
|
Production Period |
30 years + 10 from
end of exploration period. |
|
Relinquishment: |
50% after
5 years (35% in deep water) |
|
25% after
8 years (40% in deep water) |
|
Financial and fiscal obligations: |
|
1. Work expenditure |
 |
Work and financial
obligations are fixed for first 3 years, and second 5 years. |
|
|
2. Operating costs
|
|
Company’s
responsibility. |
|
|
3. Bonuses
|
|
According to application
for concession, referred to as “special benefits”.
|
|
|
4. Royalties
|
|
Royalty 1/8 or 12.5% in
cash (8.75% in deep water), and 1/7 in kind. |
|
|
5. Income tax |
|
Income tax on profits 50%
to 60% (presently 50%); or 35% on profits plus 23.08% remittance tax
under 1979 Royal Decree. |
|
|
Capital
cost recovery: |
Amortized
over 5 to 10 years. |
|
Operating cost recovery: |
Expensed. |
|
Pricing: |
|
Crude Oil |
|
No restrictions in law,
but royalties and income taxes on exported oil geared to “posted
prices”, with discounts. |
|
|
Natural gas |
|
Negotiable (§
58). |
|
|
Disposition of petroleum: |
|
1. Local market supply |
|
Government may require
supply to local market; Special pricing if crude exported exceeds 10 x
domestic demand. |
|
|
2. Exports |
|
Subject to ban or
restriction under § 61. |
|
|
Additional cost factors: |
|
Office in
Thailand. |
|
|
“Special benefits” agreed
in concession, e.g. scholarships, grants to universities, libraries and
lab equipment, etc. |
|
|
Employment and
training of Thai |
|
|
Approval of
employment of aliens. |
|
|
Equipment becomes property
of Thai government. |
|
|
Arbitration: |
Zurich,
Switzerland, if not otherwise agreed. Rules of International Court of
Justice of 6 May 1946. |
