PTT chief slams politicisation of petroleum bids, cites energy security

At a news conference, he said he regretted that the petroleum-concession issue had become politicised, which could jeopardise energy-policy reforms aimed at security and sustainability. 

The PTT chief said that even though there is little chance of finding new petroleum deposits as rich as in the past, the 21st round was essential to allow production continuity. This is because proven reserves of Thai natural gas, if usage remains at its current level, will last for no more than seven years if no new reserves are discovered. 

Furthermore, domestic natural gas is cheaper than imported gas, so it makes economic sense to explore for new gas fields, Pailin said.

“We should not make the opening of [new] petroleum concessions, which is a technical subject that requires knowledge and expertise, to become a political issue or something that must be won by words, or by using patronage to distract from the true topic, taking it far away from the facts. 

“There has been [an attempt to] discredit the information provided by the state, creating confusion among the people, despite the fact that the government, the Energy Ministry and involved agencies have jointly considered national energy policy based on correct data and international standards. They have emphasised the creation of energy security and increasing the efficiency of energy usage in the country, allowing every citizen to use energy thoroughly, in a fair and sustainable manner,” he said.

If the 21st round cannot proceed, PTT will have to import liquefied natural gas, which is more expensive than gas from the Gulf of Thailand, in addition to the 15 million tonnes it has already prepared for. PTT has signed a 20-year contract to buy a total of 2 million tonnes of LNG from Qatar, accounting for just 6 per cent of total demand. Thus finding more domestic reserves is important, he said. 

On the issue of whether to keep the existing concession system or switch to a production-sharing model, Pailin said the debate over this issue was largely one of semantics. In fact, if the state wants to get more benefits, any system allows for negotiation of its details. The government uses the concession system because it does not want to bear risks during the exploration stage, while in a production-sharing system, the state has to set up budget to share these risks with the private sector. 

He said the government had to support the use of gasohol. The cost of ethanol is not dependent on world oil prices because it is a by-product that helps the nation to reduce crude-oil imports by 1.4 billion litres a year, worth at least Bt20 billion per annum.

On the allegation that the Energy Ministry had approved using the Oil Fund to subsidise the cost of PTT’s imports of liquefied petroleum gas since 2011, he said the ministry had opened the chance for every private company to import LPG liberally. However, since such imports are not worthwhile, no private firm has imported LPG except PTT, which is a state enterprise with a duty to secure energy for the country.

LPG is a limited resource. Using natural gas from the Gulf of Thailand to produce LPG has been laid down in the national development plan since the Eastern Seaboard project, which dictated the building of a petrochemical industry in parallel with gas-separation plants to maximise the value of gas, and to drive the economy, instead of just burning it as a fuel. 

Under the latest LPG price restructuring, every user group including petrochemical companies are subject to the same cost, which is adjusted according to its price in the world markets.

In a separate matter, a source close to Prime Minister Prayut Chan-o-cha said the general would not take part in a government forum tomorrow on the pros and cons of opening the 21st round of bidding on petroleum exploration and production concessions. 

The source said the prime minister did not want to be regarded as taking sides on this issue. The government has assigned PM’s Office Minister ML Panadda Diskul to represent it at the forum. 

Meanwhile, a group led by ex-prime minister Abhisit Vejjajiva, former finance minister Thirachai Phuvanatnaranubala, and energy activists Panthep Puapongpan and ML Kornsiwat Kasemsri have suggested that instead of tomorrow’s public forum, the bidding round should be discussed in a small group. This would allow opposing sides to find common ground for the country’s policy to ensure an adequate energy supply to meet future needs.

Thirachai said this discussion should be chaired by Prayut himself, not Panadda. Representatives of the public should also specify who should represent their stand on this issue, instead of allowing the government to assign people who have no previous experience with the matter.