PTT: Clear detail for 21st petroleum concession required by this year

[webfact]

PTT: Clear detail for 21st petroleum concession required by this year

BANGKOK, 4 June 2015 (NNT) – The details of the 21st petroleum concession should be made clear within this year for the nation’s energy security, says the PTT Chairman.

PTT Plc Chairman Piyasvasti Amranand has said that national authorities should clarify the details of the 21st petroleum concession within this year, on whether the concession will be extended to existing private companies to explore, or will this role be tailored for the government. Production capacities are to be kept at the same level.

He has said that it is expected the current domestic natural gas sources will provide enough energy for domestic consumption for only 6 more years, while the expiration of the current concession is due in 7 years. The uncertainty on this new concession will force entrepreneurs to cancel their investments due to risks which could pull the production capacity down from 2,200 to 500 cubic feet per day.

He suggested that the best solution is to allow the concessionaire to participate under supervision from the government, and allow the Ministry of Commerce have stock holdings in the 2 concession entities of the PTT Exploration and Production Plc and Chevron within this year, to raise investors' confidence in the private sector.

The maximum stock holdings held by the Ministry of Commerce will have to be considered for the appropriateness in relation to the amount of natural gas reserves in the future.

He has also mentioned that it is unnecessary for Thailand to establish the National Petroleum Company to perform the petroleum exploration independently, as Thailand currently does not have the expertise in petroleum exploration.


-- NNT 2015-06-04

[Srikcir]

"the Ministry of Commerce have stock holdings in the 2 concession entities of the PTT Exploration and Production Plc and Chevron within this year, to raise investors' confidence in the private sector"

The Ministry of Commerce will use taxpayer funds to purchase stock and, thus, put those taxpayer's funds at risk. And it would appear that use of such action is currently ILLEGAL.

I recall that current law only provides for a concession system and the NLA is still examining the possibility of allowing additional systems as an amendment to the Petroleum Income Tax Act of 1971. One of the proposed systems is the "joint investment by the public and private sectors." This system involves a stock ownership approach.

Although General Sakol Sajjanit, chairman of the NLA committee to review the law, felt that this is the most favourable alternative, the government would "benefit the most" under another system called the production order system wherein the government would merely hire a company to produce petroleum. The Nation 2015-05-06

Obviously without State control of the companies, the Thai treasury faces large to unlimited risks. In view of the statement that "Thailand currently does not have the expertise in petroleum exploration," either the concession or production order systems would be best suited for Thailand's purposes.