Thesis (M.Eng.)--Chulalongkorn University, 2012

In assessing of alternatives for petroleum production concession extension in Thailand; the most important key factors in decision on petroleum production concession extension is the benefit-sharing between concessionaire and the government. The main factors used in evaluation of alternatives for petroleum production concession extension are the timing of extension of concession, and the volatility of petroleum prices. Evaluation of alternatives for concession extension, regardless of these factors, cannot bring about the best alternative results. The objective of this thesis is to study the effects of the timing of extension of concession, and the fluctuation of petroleum prices, in evaluation of alternatives for petroleum production concession extension under fiscal regime Thai I and Thai III. The study is divided into three parts: (1) to evaluate the alternatives for petroleum production concession under fiscal regime Thai I and Thai III, (2) to evaluate the alternatives for petroleum production concession by deferring the decision of concession extension using Real Options Valuation under the two fiscal regimes, and (3) evaluation of alternatives for petroleum production concession with regard to the impact of the volatility of petroleum prices. In the first study, it was found that in the decision of concession extension under fiscal regime Thai I, both concessionaire and the government’s returns were feasible similar to the decision of concession extension under fiscal regime Thai III. In the second part of the study, deferring the decision of concession extension under fiscal regime Thai I and Thai III resulted in lower returns for both the oil companies and the government. And, finally, in the last section, the gas price fluctuations enhance the volatility of profits. The volatility of profits under fiscal regime Thai III are less than the volatility of profits under fiscal regime Thai I for both the government and the concessionaire.