The new PTT board of directors has instructed its management to hasten the divestiture of the energy conglomerate's shares in two oil refineries and complete the spin-off of its natural gas-transmission business before the national election.
Speaking after the board meeting yesterday, new PTT chairman Piyasvasti Amranand said the board touched on the progress of the plan to sell PTT’s shares in Star Petroleum Refining (SPRC) and Bangchak Petroleum – a process that should be completed before the spinning off of the group’s gas-pipeline business.
Piyasvasti said the management informed the board that negotiations between the Ministry of Energy and Chevron, which holds a 64 per cent stake in SPRC, on the construction and operating contracts had reached a conclusion and the company was now only awaiting approval from the National Energy Policy Council.
Nevertheless, he said some PTT board members expressed concern about possible impacts from the float of SPRC shares on the local stock market could have on oil supply security and also expressed concern about the procedures of the float.
Management would respond to that concern at a later date.
Piyasvasti said PTT had earlier diluted nearly all its stake in Bangchak but bought back shares when the company faced financial problems.
However, since Bangchak had regained its strength in terms of its refinery, retail oil and related businesses, there should be no negative affect if PTT divested its 27 per cent stake in the firm.
“The board thinks we can speed up and finish the sell-off of PTT’s holding in SPRC and Bangchak before the spin-off of the gas-pipeline business, which is more complicated,” Piyasvasti said.
“We consider hastening the process will be beneficial to shareholders over the long run because if society remains suspicious and think PTT takes advantage of consumers, it will send a negative impact to shareholders and damage the organisation and society eventually.”
Piyasvasti, a former energy minister and head of an energy reform group, was appointed to his new role by the ruling National Council for Peace and Order and tasked with restructuring the energy conglomerate after it came under severe attack from the public over its perceived lack transparency and abuse of monopolistic power.
More study needed
The new chairman said a Cabinet resolution made prior to the privatisation of PTT suggested the group should set up a new company to handle the spun-off natural gas transmission business but this would require more study.
As a result, he said PTT would initially separate the accounts and assets of the gas-transmission business to deliver clarity and make it easier for regulators to oversee the company while also serving third-party access regulations that the Energy Regulatory Commission plans to issue early next year.
In spinning off the gas-pipeline business, PTT needed to find clarity on the regulatory regime, the tariff formula and on who would be responsible for the tax burden incurred by the move.
Nevertheless, PTT board would try to finish both sell-off plans before the next national election.
Piyasvasti said management did not report on the company’s troubled palm oil investment project in Indonesia but its chief executive Pailin Chuchottaworn had already briefed him on the investigation into the project. The probe was being scrutinised by the anti-graft agency.
The board also acknowledged Somchai Sujjapongse’s resignation, effective July 21, and appointed Rungson Sriworasat to replace him on the board. Don Wasantapongse would succeed Boonsom Lerdhirunwong on the board also.