INVESTIGATION OF AN EFFICIENT PETROLEUM FISCAL REGIME FOR THAILAND

Abstract

The paper investigates the current fiscal regime, utilizing in Thailand (both Thailand-I and Thailand-III), under the condition of typical production profile and cost structure of petroleum production in Thailand. The analysis is based on various sizes of the actual operating oil and gas fields in Thailand from the past. The efficiency of the fiscal regime is the objective of the sharing benefit between the host government and the oil company, which creates the win-win situation, thus, prevents the future renegotiation among the parties. The analysis performs by the discounted cash flow model as a base case model to estimate the government take and company take. The results are compared with neighboring countries such as Malaysia and Myanmar. Monte Carlo simulation is also used to verify the result under the distribution of various inputs to get the distribution of the company take. The result shows that Thailand-I tends to be regressive in most cases, concerning its regressive tool like fixed-rate royalty. Though, Thailand-III gives a good response to wider changing conditions but still has a regression in some cases such as long production fields or costly fields. Moreover, the modification of fiscal regime is examined under the concession externsion in this study. By adjusting the advantageous and detrimental elements in Thailand-III, the progressivity is observed with the proper gain to the government.