Get moving on petroleum exploration, experts urge govt

Economy July 11, 2014 00:00

By Pichaya Changsorn

The Natio

Thailand needs to speed up the holding of the next round of petroleum exploration bidding to avoid soaring electricity tariffs and severe impacts to its petrochemical industry, finance and energy experts warned yesterday.

Banyong Pongpanich, chief executive officer of Kiatnakin Phatra Financial Group, said that if the delay to the 21st round continued, the country would see a steep rise in power prices and the petrochemical industry would face a lot of problems.

The petrochemical industry, which uses natural gas from the Gulf of Thailand as a feedstock, should not be given low priority to use the indigenous resources at the highest prices, as suggested by some non-governmental organisations, he told a seminar on energy reform held by the economics faculty of Thammasat University.

"The opening and the timing of the new concession round are very important," he said.

Banyong was recently appointed by the junta to sit on the "superboard" overseeing all state enterprises, including energy conglomerate PTT, which has run into heavy criticism.

He was part of the financial advisory team that assisted the hugely successful initial public offering of PTT in 2001.

He also opposed a proposal by some NGOs to change Thailand’s petroleum concession regime to the production-sharing system (PSC), since that would allow case-by-case negotiations with petroleum exploration companies that would open the way to corruption.

"A country that uses PSC must be a country with a good transparency record and low corruption. It is not suitable for Thailand, which stands at No 102 in the world’s transparency index. [Also], do we have bureaucrats who are competent enough to negotiate head on head with Chevron and Esso?" he said.

Manoon Siriwan, a well-known energy expert, said that with the depletion of natural-gas reserves looming in only eight more years, the country had to open in a hurry the new round of petroleum exploration bidding to find more reserves.

Since the country has to import more natural gas from abroad, the electricity tariff is predicted to jump by 30 per cent in 10 years.