People’s network rejects govt plan on natural gas concessions
THE PEOPLE’S Network for Energy Reform (PNER) has voiced its opposition to a government plan to invite new bids for natural gas production in the Erawan and Bongkot fields under the current concession scheme, suggesting that the government should enter in
In a statement, PNER also rejected Prime Minister Prayut Chan-o-cha’s suggestion that the non-governmental organisation should bear responsibility if electricity prices go up in the near future because of its call for regulatory reform of gas production contracts in the Gulf of Thailand.
The premier said further delays in signing contracts could lead to higher electricity prices since most indigenous gas is used for power generation.
According to PNER, the premier misunderstood key points concerning its proposal to reform the energy sector.
Existing concessions for the Erawan and Bongkot fields in the Gulf of Thailand, which currently account for more than 70 per cent of the country’s domestic gas output, are due to expire in 2022-23, prompting the government to announce plans to invite new bids to ensure the continuation of gas production.
The Energy Ministry said earlier it would hold competitive bidding for the new concessions within the next year.
The Erawan and Bongkot fields are currently operated by the US company Chevron and Thailand’s PTT Exploration and Production, respectively, under the expiring concession contracts.
According to the PNER statement, gas reserves in both fields are provable so the government should not use concession contracts any more.
Instead, PNER said, it should consider using service contracts when the present concessions expire to maximise the state benefits since Erawan and Bongkot fields have yielded huge amounts of gas over the past four decades, resulting in significant profits for the existing concessionaires.
However, the premier said Thailand is not yet ready for service contracts in petroleum production.
PNER said there are three main methods to manage resources – concession contracts for the lowest potential fields, followed by production-sharing contracts for the higher potential fields and service contracts for the highest potential fields.
The Energy Ministry said it is also amending the petroleum law to facilitate production-sharing contracts in the future and expects the amendment to be approved by the National Legislative Assembly in coming months.
Earlier, Chevron announced plans to reduce the number of workers in Thailand to reduce expenses amid the global oil and gas price slump.
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