The search for hydrocarbons in Thailand began in 1921 in the Fang Basin in northern Thailand where oil seeps had been reported. Prior to the start of World War II a number of shallow wells were drilled in the area by various government organizations in an effort to exploit tar sands. Immediately after the war the Department of Mines was given the responsibility of exploration.

          In 1954 Thailand changed its policy of petroleum exploration by allowing private sectors to be involved. The same year Hunting Geophysics of London undertook aeromagnetic work in the Chao Phraya area and the country’s first oil discovery was made at Chai Prakan in the Fang Basin by the Department of Mines.

          In 1956 the responsibility of exploration in Fang Basin was given to the Department of Energy Defense (DED). It soon signed a contract with the Refining Associated Co., Ltd., to construct a small refinery with a 1,000 BOPD capacity.

          Union Oil (which later became Unocal) was granted exploration rights to the Khorat Plateau in 1962 but did not initiate serious exploration work due to lack of a specific petroleum law. Raphael Pumpelly was also awarded a permit in an adjacent area at around the same time and the Gulf area around Bangkok where it drilled some stratigraphic wells.

          In 1964 a large number of foreign companies applied for offshore exploration rights, although it was not until September 1967 that six companies were informed that they were to be awarded 17 blocks in the Gulf of Thailand. This Petroleum Act became known as Thailand I. Thus following the 1^st  Licensing Round, offshore blocks were awarded to Tenneco, Gulf, Conoco, Amoco, Union, BP, Triton and Pan Ocean. Union and Meridian were also awarded blocks on the Khorat Plateau at the same time.

          In 1971, Union drilled the first deep well (and the first bt a private company) on the Khorat Plateau (Kuchinarai – 1) and Conoco the first offshore well (Surat – 1). However, both exploration wells failed to encounter hydrocarbons.

         The first discovery in the offshore area was made by Union at 12-1 in its B12 concession in the Pattani Basin in January 1973. The discovery was later named Erawan, after the three headed elephant in the Thai folklore. This was followed by a number of other discoveries made in blocks awarded during the 1^st Licensing Round. One of the most important was made by Tenneco in B15 in the Malay Basin in May 1973, when wildcat 15-B-1X was abandoned as an oil and gas well. Although not originally thought to be large, later drilling by BP and Texas Pacific confirmed the presence of a sizable gas accumulation, which subsequently became known as the “B” structure. This field is currently operated by Total as the Bongkot Field and production rates are highly impressive.

          Licensing rounds held in 1972 and 1974 saw the awarding of blocks in the Andaman Sea. Amoco and Pan Ocean were granted concessions there in the 1^st Licensing Round and later joined by Lewis Weeks Associated, Esso Oceanic and Union. In 1975 Sun Oil took over the operatorship of Gulf’s three blocks in the Gulf of Thailand and the following year Conoco transferred its rights in two concessions to Union.

          In 1978 Union signed a sales contract to supply gas to the domestic market, and the development of the Erawan Field began immediately thereafter, with production commencing in August 1981. Further fields were subsequently brought on stream in the following years by the same operator.

         Shell and Esso were granted large blocks in the Phitsanulok Basin and Khorat Plateau, respectively in 1979, as a result of the 6^th Round. Both companies had immediate success when in 1981 Esso discovered the Nam Phong gas field and Shell the Sirikit (or Lan Krabu) oil and gas field. An immediate rush for onshore acreage followed, with Esso increasing its Khorat holdings and other blocks being awarded to Terra Marine, Phillips, MGF, Bass Strait, BP, Britoil, Southwest Consolidated Resources and Gopher in rounds held between 1980 and 1985. A number of successful wells were drilled in the 1980s on this acreage. Some of it is still held under license although participating companies have changed.

          Due to high global oil prices in the early 1980s a new fiscal regime, Thailand II, was introduced in 1982. The new regime introduced 20% limit cost recovery of annual gross revenue and increased royalty corresponding with an increase in production rate. However, due to a slump in oil prices in 1985 Thailand II had a very short life as it was designed for medium and large size fields.

         The early 1980s saw the entry of a number of new companies into the offshore area as a result of acreage being made available due to partial and total relinquishments. These include Pecten, Placid, Shell, Brioil and Premier.

          In June 1987 Shell made the first substantial oil discovery in the Gulf at Nang Nuan –1 in B6/27. The field, located in the Chumphon Basin, was first brought onstream in January 1988 and is currently Thailand’s only offshore oil producing field.

          British independent Premier Consolidated made an oil discovery at Songkhla – 1 in B11/27 in November 1988. The discovery was the first made in the Songkhla Basin  and this was followed by the discovery of oil at Bua Ban – 1 in the same basin in April 1990. Although these fields are not large, their favorable location near the coast makes development in the near future a possibility.

          A new fiscal regime, Thailand III, became effective in 1989. This was introduced for the 13^th Licensing Round. One of the main changes was the revision of the royalty rate to a sliding scale to enable commercial production for all sizes of fields. The three concessionaires who were under Thailand II terms successfully applied to be under Thailand III, while those from Thailand I were willing to stay with the old terms.

          In 2000, Thailand’s petroleum exploration activities were active onshore and offshore both in the Gulf of Thailand and the Andaman Sea where there had been no petroleum drilling for a decade. Unocal Andaman drilled five exploratory well in block W9/38, however only small trace of gas was found in Kantang-1A well.

          To the end of 2001, the total number of wells drilled in Thailand was 2,970, comprising of 454 exploratory, 424 appraisal, 2,001 development wells.  Since 1971, a total of 17 rounds of concession bidding have been completed and 25 concessions were awarded. Current major operators are Unocal, Chevron, PTTEP, ThaiShell and ESSO. Over-21 fields are producing hydrocarbon and several development projects are planned.

          Total proved petroleum reserves as of December 31, 2001 are 12.3 Tcf for gas, 250.4 MMbbl for condensate and 313.0 MMbbl for oil.

          At the end of 2001, 110 petroleum production areas were granted to concessionaires. 25 areas were granted onshore area, 23 for oilfield and only 2 for gasfield (Nam Phong and Phu Horm-1).  In the Gulf of Thailand 85 production areas were approved.  Most of them are gas and condensate fields operated by Unocal and PTTEP while Chevron holds gas, condensate and oil fields.