The Pheu Thai-led coalition government is set to resume talks with Cambodia regarding the exploration of an offshore oil and gas field valued at over US$300 billion, a matter that has caused disputes between the two nations since the 1970s.
Prime Minister Paetongtarn Shinawatra, who assumed office in September after her predecessor Srettha Thavisin was dismissed by the Constitutional Court, emphasized that joint exploration is one of her administration’s top ten urgent priorities. This initiative aims to enhance Thailand’s diminishing reserves, manage electricity prices, and address a rising bill for fuel imports.
Earlier this year, Thailand and Cambodia agreed to negotiate how to jointly exploit the 26,000-square kilometer block, which is estimated to contain around 10 trillion cubic feet of natural gas and 300 million barrels of crude oil. However, the negotiations could be challenging due to historical diplomatic tensions and sensitivities regarding territorial sovereignty. Talks have been on hold since 2001, when both countries acknowledged that territorial disputes should be addressed simultaneously with resource development discussions.
Some experts in Thailand remain optimistic that the pressing urgency stemming from declining gas production and reserves, alongside a narrowing opportunity for fossil fuel usage, will lead to a breakthrough that allows the two countries to commence exploration while deferring territorial discussions.
“We don’t need to resolve the different opinions on boundaries; we just need to engage in neighborly discussions to utilize the resources,” Finance Minister Pichai Chunhavajira stated in parliament last month. “This approach will enhance security and reduce utility costs.”
Cambodia has expressed its commitment to discussing the matter further with Thailand. Government spokesperson Pen Bona indicated that they are ready to continue negotiations if the new Thai government is willing.
Natural gas accounts for 60% of Thailand’s energy needs, with domestic production supplying more than half of that demand. At the current consumption rate, Thailand risks depleting its gas reserves within five to ten years. There are also concerns regarding the nation’s capacity to meet increasing energy demand, particularly as it seeks to attract energy-intensive data centers to bolster its major automobile and tourism sectors.
Without proactive measures, Thailand will likely need to import significantly more liquefied natural gas (LNG) to fulfill its power generation requirements, warned Kurujit Nakornthap, executive director of the independent Petroleum and Energy Institute of Thailand. The untapped reserves are projected to extend Thailand’s offshore gas supply for at least another 20 years, he added.
Regarding revenue sharing, both Thailand and Cambodia have proposed models for the Overlapping Claims Area, which former Energy Minister Pichai Naripthaphan estimates contains resources valued at no less than 10 trillion baht (approximately $300 billion). If successful, these negotiations could benefit companies like Chevron Corp, Shell Plc, and PTT Exploration & Production Pcl, which won concessions in the 1970s but have been unable to explore the disputed zones. ConocoPhillips and TotalEnergies SE have also been reported to have obtained concession rights in Cambodia.
Cambodia, although largely reliant on foreign fuel, has fewer incentives to expedite negotiations. Unlike Thailand, it lacks a robust domestic oil and gas sector and will continue to depend on neighboring countries for energy imports.
“Regardless of the revenue-sharing model, Thai producers and contractors would handle most of the work in the overlapping claims area, positioning Thai companies as the primary beneficiaries,” noted a report from Bangkok-based consultancy CLC Asia last year.
Thailand has experience with joint exploration, having reached an agreement with Malaysia in 1979 to establish common boundaries in the lower Gulf of Thailand, designating a smaller area of 7,250 square kilometers for ongoing cooperative development. A spokesperson for the Thai government stated that negotiations with Cambodia are a priority for the prime minister, though no timeline has been disclosed.
However, some critics argue that Thailand should resolve the overlapping territorial claims before discussing the mutual benefits of commercial exploration.
“If these negotiations proceed, they may not reach a conclusion, while the government risks losing credibility,” warned former senator Somchai Swangkarn, cautioning that any compromise on Thai sovereignty could provoke public backlash. “We must prioritize negotiating demarcations; this is the only viable path forward.”