Merak Fiscal Model Library
A world-class collection of standardized fiscal models
Thailand R/T (1991)
Fiscal Term Description
Fiscal Regime Type Royalty & Income Tax, with a SRB (Special Remuneration Benefit)
18th Bid Round, Petroleum Act, B.E. 2514 (No. 2) B.E. 2516, (No. 3) 2522, (No. 4) B.E. 2532,
Governing Legislation (No.5) B.E. 2534 (B.E. year of Buddha 2534 equals 1991) – Thailand III.
State Participation Not required but negotiable.
Signature Bonus None on signing, but on particular dates possibly negotiated.
Rental and Fees Various small.
Production Bonus None in latest bid round.
Royalty on petroleum BOE on a sliding scale royalty rate:
Production Royalty
Up to 60,000 barrels per month 5.0%
60,000 – 150,000 barrels per month 6.25%
Royalty
150,000 – 300,000 barrels per month 10.0%
300,000 – 600,000 barrels per month 12.5%
In excess of 600,000 barrels per month 15.0%
The rate of royalty in deep-water blocks (over 200 meters) is 70% of above.
A supplemental profits tax is imposed ranging from 0 to 75% of net income. The sliding scale tax
rate is determined by formulas including “K” factor, uplift, changes in inflation, and exchange rate,
and meters of wells drilled. All terms in formula are fixed, except for "K" factor (150,000 to
1,200,000) and uplift (10% to 35%), which vary from area to area and by license round. All costs
are expensed for SRB purposes. Example calculation in baht local currency:
(1) Revenues& Deemed Profit
Proj Net Revenue (net of Royalty) = 2,500 MM baht
Less Costs (opex, capex, uplift, loss carried forward) = 500 MM baht
Petroleum Profit = 2,000 MM baht
Special Remuneration (2) De-escalation of Adjusted Gross Revenue
Benefit (SRB) Inflation index from when concession granted = 1000 / 600 = 1.66
Exchange Rate Index from when concession granted = 20 / 26 = 0.76
Adjusted SRB Revenue = Net Revenue = Infl Index * Exchange Rate Index
Adjusted SRB Revenue = 2,500 / 1.66 / 0.76= 1,950 MM baht
(3) Gross Revenue Per Cumulative Meter Drilled
Actual cumulative meters drilled* = 70,000 meters
Geological Constant ("K" factor) = 150,000 meters
Effective cumulative meters drilled = Actual Cum + K factor = 220,000 meters
Adjusted Gross Revenue = 1,950 MM baht
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Thailand R/T (1991)
Fiscal Term Description
Revenue per meter = Adjusted Gross Revenue/ Effective Cum Meters = 1,950 MM baht
/220,000 meters = 8,864 baht / meter
(4) Sliding scale Tax Rate (%) Lookup table
Gross Revenues per meter (baht/meter) Rate
Up to 4,800 baht / meter 0% max
Rising by 1% per 240 baht/meter to
40% max
14,400
Rising by 1% per 960 baht/meter to
60% max
33,600
Rising by 1% per 3840 baht/meter 75% max
(5) Calculation of Special Remuneration Benefit Due
Special Remuneration Benefit Tax Rate from above table = 17%
Petroleum Profit = 2,000 MM baht
Special Remuneration Benefit Tax = 340 MM baht
*The Annual Project SRB Meters Drilled can be in put on the Burden – Custom Side Tab.
• Petroleum Income Tax is at the rate of fifty per cent (50%). (As the ordinary Income Tax rate is
35%, only this potion is creditable for US taxes.)
• Intangibles and Exploration costs after start of production are expensed. Other investments
are depreciated on a straight-line basis: 10% for all pre-production capital costs and 20% for
post production development capital.
• The tax reference price for exported oil is the posted price less a discount in the first nine years
of production, as follows:
Income Tax
Years Percentage of Posted Price
1-4 7%
5-7 5%
8-9 3%
Higher discounts available for deep water.
• Losses may be carried forward for ten years.
• Royalty, SRB and Bonus payments are tax-deductible. Loan Interest is not deductible.
Withholding Tax None.
There is a ring fence around the block for Special Remuneration Benefit and around the
Ring Fence concession area for Income Tax
The concessionaire is required to supply petroleum (oil and non associated gas) sufficient for
domestic demand, pro rata to its share of total production in Thailand. The price is a mix of
DMO refinery yields, imported crude oil prices, and quality adjusted average realized price on crude oil
exported by all concessionaires. Enter into the model the effective price of all sales.
FML Thailand Exch Rate, FML Thailand Inflation Index (for SRB Exchange Rate and Inflation
Global Data File Used adjustments).
Schlumberger Information Solutions
Merak Fiscal Model Library is licensed and supported by Schlumberger Information Solutions (SIS). SIS is an operating unit of Schlumberger that
provides consulting, software, information management and IT infrastructure services to support the core operational processes of the oil and gas
industry. SIS enables oil and gas companies to drive their business performance and realize the potential of the digital oilfield. SIS is on the Internet at
www.sis.slb.com 04-IS-171
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Thailand R/T (1991)
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