By an OGJ correspondent
BANGKOK, Mar. 21 -- Members of Thailand's government cabinet endorsed amendments to extend and ease terms of an oil and natural gas exploration concession in the Gulf of Thailand held by Harrods Natural Resources Inc.
Harrods Energy (Thailand) Ltd. was given a 1-year extension until September 2002 to drill an exploration well on Block B2/38. That well was supposed to have been drilled before September 2001 as part of the first 3-year obligation period in which the firm was committed to spend a minimum $3 million.
The Thai government also agreed to let Harrods Energy convert obligation works on Block B11/38. Instead of the original agreement to shoot an 8,550 sq km 3D seismic survey in the second year of the second 3-year obligation period, Harrods Energy is now obligated to drill two wells in the third year of that period.
Harrods Natural Resources is owned by London's Harrods department store magnate Mohammed al Fayed.
Controversy
Government officials vehemently denied charges by the opposition Democrat party that Thai Prime Minister Thaksin Shinawatra agreed to those changes because of his personal friendship with the Egyptian-born magnate. Officials said it is not unusual to amend petroleum concession licenses when there is good cause.
Extension of the exploration period for Block B2/38 was triggered by the Office of Environmental Policy and Planning's delay in approving the environmental impact assessment (EIA) for that project, officials said. Harrods Energy must undertake an additional EIA study for the proposed well, to be located 15 km off Thailand's coast.
Because of the complex geology underlying Block B11/38, Harrods said it needs more time to pinpoint proposed drill sites to reduce exploration risks. Despite the changes in exploration activity, the company's financial commitment in the second obligation period remains the same.
Harrods has been soliciting international oil firms to buy as much as 70-75% interest in its four wholly owned blocks in the Gulf of Thailand, including B5/27 and B12/32 (OGJ Online, May 14, 2001). The company has spent more than $43 million on its Thai petroleum ventures and drilled more than 20 wells on those blocks.
