Energy Ministry to set up expert panel for studying the creation of national oil company

[rooster59]

Energy Ministry to set up expert panel for studying the creation of national oil company

By The Nation

 

Dr Kamolphan Cheewaphansri and five other leaders of the People’s Network for Thailand Energy Reform were |convicted and fined for violating the law governing public |rallies yesterday. They spent Thursday night at Dusit Police Station.

 

THE ENERGY ministry plans to set up a committee made up of representatives from related state agencies, energy experts and civil groups to study the establishment of a national oil company (NOC), after the National Legislative Assembly (NLA) passed the Petroleum bill on Thursday.

 

Energy minister General Anantaporn Kanjanarat said yesterday that the committee could include opponents to the bill, assuring an impartial study. 

 

The comprehensive study could be competed within 60 days, he said. Previously the National Energy Policy Council had assigned the Finance Ministry to look into the establishment of the NOC, he said. 

 

However, the future of the NOC is less than certain.

 

After facing opposition from the business community and prominent figures, section 10/1 NOC was scrapped from the bill. However, it was annexed to the end of the bill, meaning the government has no obligation to create it.

 

Deputy Prime Minister Wissanu Krea-ngam said yesterday that the Cabinet would decide whether or not an NOC would be set up. 

 

If the Cabinet decides to goes ahead, Wissanu said there might be a separate law or new amendment to the Petroleum Bill to provide a legal framework for the NOC. 

 

Meanwhile, Veerasak Pungrassamee, director-general of the Mineral Fuels, said the department would conduct the study to determine the best method to be used for the next auction of petroleum exploitations. There are three options: concession, production sharing contract and service contract. 

 

He said the new terms of reference (ToR) would be finished by the end of April and the auction would be held after the ministry issues organic laws in line with the Petroleum Bill. 

 

The existing concessions for both Erawan and Bongkot fields, which account for a combined 70 per cent of the countries oil and natural gas reserve, are due to expire in 2022 and 2023 respectively.

 

At the same time, Kamolphan Cheewaphansri, one of the key leaders of the People’s Network for Thailand Energy Reform, who support the NOC but oppose the Petroleum Bill, yesterday vowed to continue the fight to establish the NOC. 

 

The NOC is considered to be an effective mechanism to protect national energy resources, according to the group. Their stance is strongly opposed by the business community and former deputy prime minister MR Pridiyathorn Devakula.

 

In a related development, another key bill is a Petroleum Income Tax Bill, which was also passed by the NLA on Thursday. The Finance Ministry will supervise tax collection from oil companies awarded exploitation contracts. 

 

The Finance Ministry aims to close a loophole by imposing stringent rules on business operations between a parent company based abroad and its subsidiary in Thailand. 

 

The new rules are expected to help the Revenue Department collect more petroleum income tax as they have the potential to prevent transfer pricing. This involves a parent company charging unreasonably high costs, such as rent of an oil rig from its subsidiary to deflate its profits, said Prapas Kong-Ied, deputy permanent secretary of the Finance Ministry. 

 

Currently, petroleum income tax is 30 per cent on top of profit, compared to 20 per cent on corporate income tax for other types of businesses and industries. 

 

Source: http://www.nationmultimedia.com/news/national/30310961

 

 

-- © Copyright The Nation 2017-04-01

[klauskunkel]

Of course such a company will be set up. Some sort of a general gets to run it expertly, with the loving help of his family. 

Panel to study it? Sure, why not...

Edited April 1, 2017 by klauskunkel

[maoro2013]

I thought this was reported as abandoned even as recently as this morning. The news here ducks. 

[maoro2013]

I mean sucks.  Sorry for the spelling error.

[BigBadGeordie]

"However, it was annexed to the end of the bill, "

 

May'be the cynic in me but the word "annexed" never bodes well.

[Ulic]

Billions of Baht for a handful of the well connected.

[wakeupplease]

These Generals must be very intelligent people sat at the top of all these money pyramids, sorry I meant committees, we are so lucky to have these fine conmen (dam keyboard battery must be flat) I meant gentlemen

[Srikcir]

15 hours ago, rooster59 said:

Deputy Prime Minister Wissanu Krea-ngam said yesterday that the Cabinet would decide whether or not an NOC would be set up. 

The Cabinet operates under the approval of the Executive Branch headed by PM Prayut who will make the final decision. Typically, it is the Legislative Branch or the NLA in Thailand that would decide whether NOC becomes law but currently the Prayut-appointed NLA typically rubber-stamps Prayut's proposals. So you can be sure that if Prayut submits the NOC legislation to the NLA, it will overwhelmingly pass.

 

As the current energy company is only majority state-owned with a minority publicly-traded, the new NOC  will be 100% state-owned. As such there will be no public financial disclosures and other fiduciary controls required by the SEC such as with Thai Airlines. Of course with the new NOC the current government will direct selection for membership for the Board of Directors and Officers of the company. Ducks in a Row comes to mind.

[JAG]

A National Oil Company, now that really could be a wise investment...