Academic warns against using Article 44 for proposal on petroleum bidding

On Thursday, the network petitioned Prime Minister Prayut Chan-o-cha to use Article 44, which grants him extraordinary powers, to push for the new bidding round and also to authorise the transfer of assets in concession areas ahead of their expirations in 2022 and 2023.

“The proposal would be hard to make reality and might affect the confidence of investors in the petroleum production and exploration industry,” said Thitisak Boonpramote, head of the department of mining and petroleum engineering, faculty of engineering, Chulalongkorn University.

He said investors in the petroleum industry would normally trust the government to abide by its long-term agreements. 

If the government failed to do so and concessionaires lost out a result, investors would stay away.

The energy-reform group proposed that the government open bidding for exploration of five potential petroleum fields under the “production sharing contract” scheme, including some fields that have yet to expire. 

Thitisak said the proposal was not likely to be accepted by the existing concessionaires.

The group also proposed that the government reopen bidding on some parts of the petroleum fields under concessions that will not expire until 2022 or 2023, on a condition that the existing concessionaires would allow their assets to be transferred before the expiry date. 

The fields in question are the Erawan block owned by the |Chevron group and the Bongkot field owned by PTT Exploration and Production.

Thitisak said there was still a question over whether an organisation called the “National Energy Institute” could be set up for a production-sharing scheme if the government takes that option. A number of talents are also in doubt how the organisation will get them shortly.

“It’s understood that all parties want the country to gain higher benefits from its natural resources, but we should think of practical feasibility, including reasonable returns,” he said, adding that the petroleum business was capital-intensive and required skills and technology know-how for the long term. 

“If the government forces investors by using the special law, resulting in no one taking part in the bidding, oil reserves will be affected adversely,” he said. 

Meanwhile, a source at the Mineral Fuels Department said the agency had prepared information to present to the government on a framework based on a resolution from a National Energy Policy Commission meeting on petroleum management guidance on May 14. The time frame was set for one year and the priority task was dealing with the existing petroleum concessionaires.