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and 2023 respectively. According to the Petroleum Act, the state cannot enter either plot or do anything with the remaining petroleum resources there.The Ministry of Energy usually cites the need to “maintain energy security” when opening bidding for petroleum exploration. But in the concessional system production is motivated by profit, not energy security. Coscol Petroleum Corp, for example, temporarily halted exploration at two oil rigs, Songkhla C and Songkhla G, stopping 2,600 barrels of oil per day. If all 23 oil rigs in both areas halted operations, around 6,000 people would be out of a job.Revenues from concessions on petroleum exploration and production in Thai territory currently come from three sources:(1) Royalties. In 2011, the royalty rate was 12.1%.(2) Special remuneratory benefit (SRB). If net profit is high because of circumstances such as rising world oil prices or high output, developers must pay an additional SRB fee to the state. However, the formula to calculate SRB is complex and based on the length of the pipeline. For a site at a depth of 5km, for example, an explorer will use 10 small “slim hole” pipes to deliver petroleum. The total length of those 10 pipes will be 50,000m. The SRB formula calculates additional profit divided by total pipe length, with an exemption if profit is less than 4,800 baht per metre. In 2011, the state received SRB revenues of only 0.9% of the value of locally produced petroleum products, or 1.8% of profit before tax.Malaysia uses the market price of crude oil and gas as a reference for SRB. This formula is transparent and easy to calculate. If the global price is higher than the set price, the state will get 70% of the windfall tax.(3) Petroleum tax. The state has been using a 50% rate to collect income revenue.Comparison of petroleum resource management in Thailand and MalaysiaMalaysia has had petroleum exploration and production since 1899 when the country was ruled by the British. The largest concessionaires were ESSO in the Malay Peninsula and Shell Oil in eastern Malaysia. The country used a concessional system until independence, when it reformed its petroleum resource management and switched to a production-sharing system with the Petroleum Development Act of 1974 (PDA).According to Scope for Improvement: Malaysia’s Oil and Gas Sector, published by Eugene Thean Hock Lee in 2013, Malaysia chose a production-sharing system over a concessional one “because this system gives more benefit to the country”.At the heart of Malaysia’s PDA was transferring ownership of on- and offshore petroleum resources to the federal government. At the same time, the government founded the national energy corporation Petronas to regulate, manage, explore and produce all petroleum resources in the country. The company also founded Petronas Carigali to invest in exploration with private companies, learning new technology from those companies and helping Malaysia become more self-reliant in petroleum production.Thailand’s Petroleum Act categorically states that exploration and development must use a concessional system. Malaysia’s PDA defines local petroleum resources as being the property of the federal government, without any stipulation on type of contract, giving the government great flexibility.In 2001, Petronas began using a risk service contract (RSC) for small fields and old fields where concessions had expired. An RSC guarantees state ownership over resources remaining in fields, with private companies paid to produce as ordered.As of 2012, Petronas accounted for 50% of natural gas and oil explored and produced in Malaysia. The rest came from nine foreign companies, with clear production records for each company.In Thailand, on the other hand, the Department of Mineral Fuels only provided 2011 data for PTT Exploration and Production (23% of total petroleum investment in the country) and Chevron (26%), with no records on other investments or details.Comparison of investment, production and revenueIn 2011, local output of petroleum in Thailand was 848,299 barrels of oil equivalent (BOE) per day, while Petronas produced 1.614 million BOE per day.According to 2011 figures, total upstream petroleum production was valued at 421,627 million baht. The Thai state received 136,808 million baht in revenue, or 32.45% of production value.Corporate investment of 144,878 million baht made 139,941 million baht in net profit, or a rate of return of 97%. Thailand’s Ministry of Finance, owning 51% of PTT PCL, received 16,789 million baht in dividends. Combined revenue for the state from local upstream petroleum exploration and production was 153,597 million baht,Product typesThailandMalaysiaRatioCrude oil139,991512,00027.3%Condensate83,782115,00072.9%Natural Gas624,526987,00063.3%Elite+ 33