Thailand: Call for speed on Gulf oil bids

Thailand: Call for speed on Gulf oil bids

The private sector has urged the government to invoke Section 44 of the
interim charter to ensure that bidding for the operation of the Erawan and
Bongkot petroleum blocks in the Gulf of Thailand takes place this year.

The two blocks' operating concessions are due to expire in 2022 and 2023
respectively.

Federation of Thai Industries vice-chairman Bowon Vongsinudom said he was
not confident that the bidding for the exploration and petroleum production
of the Erawan and Bongkot blocks will be made this year.

The government has been under pressure by people with different views over
the new petroleum bill, which will be voted on by the National Legislative
Assembly (NLA) in its second and third readings today, he said.

He said he wants the regime to use Section 44 to enforce the existing law to
make way for the bidding for the two petroleum blocks or come up with new
legislation with more stringent measures to deal with the issue, Mr Bowon
said.

"I am not confident [the disputes] over the bill will end," said Mr Bowon,
adding the private sector is in favour of the existing law. "I think if the
existing concessionaires of the petroleum blocks win the bids, this would be
a boon to the continuation of gas production."

Mr Bowon was speaking at a seminar on the bill organised by the Economic
Reporters Association yesterday.

PTT Exploration and Production Plc acting executive vice-president Montri
Rawanchaikul said if the bidding for the two petroleum blocks does not take
place late this year, the country's gas production would gradually drop over
the next five years since the company will not increase production.

This could force the country to import more Liquefied Natural Gas (LNG) to
meet demand, which would subsequently affect power prices, he said.

Thitisak Boonpramote, head of Chulalongkorn University's Department of
Mining and Petroleum Engineering, expressed disagreement over the
replacement of the concession system with production sharing contracts
(PSCs) in petroleum operations.

In addition to the concession system under the existing legislation, the new
bill covers PSCs and hiring contracts.

He said that PSCs are unattractive to investors, which would reduce the
country's competitiveness in the long run.

Meanwhile, former prime minister Abhisit Vejjajiva expressed no objection to
the concept of a national oil corporation (NOC) under the bill, but wanted
the bill to give more details on when the organisation will be formed and
its authority.

He said the bill paves the way for the option for PSCs instead of a single
method of concession, so it is not a surprise there is a call for an
organisation to be established to deal with the matter.

Former energy minister Pichai Naripthaphan said it is still unclear why the
NOC has to be established.

The minister in the government of Yingluck Shinawatra raised questions about
who would run the organisation and how people could be confident that it
would not be taken advantage of by those handling the organisation's
administration.

Several countries have been successful in the oil business without forming
such corporations, such as the US, where private companies deal with the
matter, he said.

Gen Akanit Muansawad, a spokesman of the NLA subcommittee vetting the
petroleum bill, said a study carried out by the panel shows the NOC must be
formed to deal with the PSC system.

Rosana Tositrakul, a core member of the People's Alliance for Energy Reform,
said anti-bill protesters will assemble at parliament today to wait for the
results of the NLA vote on the bill.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1223436/call-for-speed-on-gulf-oil-
bids

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com