BURNING ISSUE
NRC spanner in the works a new headache for Prayut
SASITHORN ONGDEE
THE NATION

BANGKOK: -- WHY DID the National Reform Council (NRC), at its meeting on Tuesday night, vote against its energy-reform committee's backing for the Energy Ministry to proceed with the 21st petroleum-concession bids?

Either the committee wasn't convincing enough or the concession scheme's conditions might be really problematic for the country.

Kamnoon Sidhisamarn, a member of NRC's legal and justice process, posted on Facebook that he was surprised by the vote, though he was happy with the outcome.

The NRC voted 130 to 79 against the government's policy to continue the concession bidding process, with February 18 as the bid application deadline. According to the Energy Ministry, the process covers concessions for 29 onshore and offshore blocks.

Energy Minister Narongchai Akrasanee, who had been considered one of the luckiest ministers due to the falling global oil prices amidst the country's energy-sector reform, may now need some aspirin while Prime Minister General Prayut Chan-o-cha is faced with a dilemma on whether to go ahead with the bidding process.

The NRC vote is not binding. It technically does not affect the government's policy of opening the next round of bidding. The Prayut administration certainly can opt to proceed with its flagship policy.

Last month, Narongchai gave his word to investors at a forum in Bangkok that the process would proceed. If the government heeds the opinion of the NRC, petroleum exploration and production could be delayed by five years.

The Energy Ministry plans to start exploration in 2016 and production to start in 2022.

The country needs to seek more energy reserves for the sake of its future energy security. If no concessions are offered, what will Narongchai say to investors?

Currently, there are about 10 investors - both newcomers and existing concessionaires - who have applied for the bidding phase.

Although the Prayut government may be annoyed with the NRC hurdle and what it may consider a waste of time, it needs to find a soft-landing solution to this problem by again seeking the NRC's support. Lobbying NRC members to back the proposal will be the hardest part of Narongchai's challenging tasks.

The thing is, not only could the government lose credibility if it chooses not to listen to the NRC, which was established as a mechanism to endorse crucial policies, but this matter could also disrupt the government's reconciliation plans.

The government still has many things to reform and fix. Some civic groups might make a move against the government if they do not trust it anymore to proceed with the implementation of policies, especially those linked to the social-gap problem.

Source: http://www.nationmultimedia.com/politics/NRC-spanner-in-the-works-a-new-headache-for-Prayut-30252009.html


-- The Nation 2015-01-16

The PM has the power to overrule everyone and everything so little point in a vote. And this may be seen as dissent and I am sure he does not want a precedent.

Looks like a very bad time to sell concessions. Oil prices are slumping and the bottom is nowhere in sight.

Who wants to invest real money on new concessions when the future is very unclear.

Would be much better to put the plan on hold until the Oil / Gas industries are stable again.

Otherwise they will be giving this away at absolute bargain prices. Political favours maybe?

I wonder , do they start with some sort of minimum price and if not reached is it cancelled?

Hardly a spanner in the works. Another topic posted here today, says they are going ahead regardless.

what is a spanner? never heard of that word.

what is a spanner? never heard of that word.

A spanner is a tool used to move nuts and bolts. The phrase "spanner in the works" refers to a tool falling into moving machinery and stopping it working. It is used to describe anything that stops a process in its tracks.

what is a spanner? never heard of that word.

A spanner is : see link for images of the tool...Spanner

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I wonder , do they start with some sort of minimum price and if not reached is it cancelled?

The government makes its money (aka royalty) from the lessee's extraction of oil and gas according to terms in the lease.That revenue is typically market-based. If only from that aspect, the government doesn't need any minimum for the lease. However, the government should set a minimum price for award of the lease to cover the cost for government lease preparation, monitoring, inspection, environmental, and enforcement activities. That will vary according to the life of the lease, coverage, reserve size, sea depth, etc.