Thai Energy Ministry promises transparency in awarding petroleum concessions

[webfact]

Energy Ministry promises transparency in awarding petroleum concessions
By Digital Content



BANGKOK, Jan 28 -- The authorities supervising Thailand's petroleum concessionaires has established procedures to protect the national interest and can ensure transparency in bidding for such concessions, according to Permanent Secretary for Energy Areepong Bhoocha-Oom.

He responded to the National Reform Council's call for to review the 21st round of petroleum concession bids by the Energy Ministry.

Mr Areepong said he was willing to listen to opinions but he asserted that the concession system already included efficient supervisory procedures to fully protect the national interest.

He demonstrated the procedures to reporters at the Plathong Field in the Gulf of Thailand. Chevron Thailand Exploration and Production Ltd and PTT Exploration and Production Plc operate the biggest petroleum field in the gulf, where natural gas and crude oil are supplied to all domestic gas separation facilities and oil refineries.

Puangthip Silpasart, director-general of the Department of Mineral Fuels, said if the 21st round of petroleum concession bids is postponed, the country might have to import expensive liquefied natural gas and that would raise electricity fees.

She said that gas deposits at existing fields were falling. (MCOT online news)


-- TNA 2015-01-28

[ChrisY1]

I think the headline says it all......."promises transparency" ..........these guys don't what this means!!

[chotthee]

Selling oil when oil is cheap?

No wonder they say Thai junta are smart.

[smutcakes]

Hope they go through the same comprehensive and transparent bidding process which was undertaken for the railway contracts................

[surangw]

seems like in s.e. asia transparent means anyone can see through their scheme

[rubl]

Hope they go through the same comprehensive and transparent bidding process which was undertaken for the railway contracts................

bidding process? More a matter of a country to invest via soft loans and/or grants, the train stuff that is.

The on topic bidding is still to take place.

[chainarong]

So long as it isn't the Prayuth - o - cha transparency Government to Government agreements, maybe , just maybe some transparency will be seen, Thailand's credibility is on the line, question is can you be believed.

[rickirs]

"the country might have to import expensive liquefied natural gas and that would raise electricity fees."

NO.

Right now the country should be hedging LNG supplies for the next 12 months at today's cheap prices that can't sustain oil & gas development. If prices don't rise after a year, Thailand gets a "bonus" savings. In fact Thailand can stockpile natural gas in existing offshore wells. When fossil fuel prices rise again to more than $65/bl, then award oil & gas reserves. Unfortunately, the impetus for this sale comes from the Junta's desparation to get a quick economic recovery from the concession fees. Economic common sense does not exist.

[Tep]

"the country might have to import expensive liquefied natural gas and that would raise electricity fees."

NO.

Right now the country should be hedging LNG supplies for the next 12 months at today's cheap prices that can't sustain oil & gas development. If prices don't rise after a year, Thailand gets a "bonus" savings. In fact Thailand can stockpile natural gas in existing offshore wells. When fossil fuel prices rise again to more than $65/bl, then award oil & gas reserves. Unfortunately, the impetus for this sale comes from the Junta's desparation to get a quick economic recovery from the concession fees. Economic common sense does not exist.

Forgive me if I am a little slow on the uptake. Your proposition is to suspend production of Gulf Gas and retain the estimated 7 - 8 years of reserves until a time of higher gas prices? Since gas production is under concession from the Department of Mineral Fuels to private companies, specifically Chevron, Mitsui and PTTEP, who will tell their shareholders that the billions of dollars of investment is going to be suspended indefinitely. Then there is the matter of the multibillion dollar investment in the petrochem industry in Map Ta Phut. We just tell all those workers to take a holiday for a while?

How do we hedge LNG? Currently PTT purchases LNG from Qatar under long term contract and on the spot market. LNG only comprise about 2% of the gas used for power production. 70% of Thailand's power production comes from gas; 4/5 from gulf gas and 1/5 from Myanmar (about). Gulf gas is sold by PTT to EGAT and the private gas power utilities at Pool Prices which are cheaper than LNG imports from Qatar although possibly not cheaper than LNG from US shale gas. However, the US infrastructure to export shale gas is currently insufficient since they spent billions building infrastructure to import gas before the shale revolution and now have to retrofit to export. Most LNG trains in terminals in the Gulf of Mexico are fully booked as far as I am aware.

So we replace cheaper Gulf Gas with more expensive LNG from Qatar and hedge this? For what purpose? You hedge on long term contracts to manage the risks posed by price fluctuation.

I think you will find that the impetus for the new Concessions is to try and find new sources to help Thailand meet its needs for future power production. The regulator has done the sums. Replacing Gulf and Myanmar Gas with LNG will result in a raise in the power tariff. There are also issues of fuel security through over-reliance on gas but that's another issue.

ERC issued an annoucement in October last year to require PTT and PTT LNG to allow Third Party Access to their pipelines and LNG terminal. The TPA Codes are currently under review before approval. This will provide opportunities for US shale gas to be exported to Thailand and for Thailand to benefit from the US Shale Revolution. You will also see more and more decoupling of the gas price from long term oil contracts with the development of hub trading.

I can't quite understand how your proposal will do anything but cause my lights and air-conditioning to stop when the gas power plants run out of fuel, not to mention the bankruptcy of billion dollar energy firms involved in the gas production and petrochemical industries.