Energy activists are calling on the government to revise and repeat the bidding process in which PTT Exploration and Production (PTTEP) Plc won the rights to explore and produce petroleum in both the Bongkot and Erawan fields in the Gulf of Thailand.
The People's Alliance for Energy Reform (PAER) yesterday lodged a petition against the bidding with Prime Minister Prayut Chan-o-cha, saying the bid would work in the interest of PTT Plc and its subsidiaries, not the state or the people.
The concessions for Erawan and Bongkot, currently held by Chevron and PTTEP, are due to expire in 2022 and 2023, respectively.
PTTEP was recently awarded the rights to explore and produce petroleum in both fields.
The state-owned company is said to have beaten Chevron, an energy company from California, and its partner, Mitsui Oil Exploration, in both fields.
The bid result was endorsed by the cabinet on Thursday. Energy Minister Siri Jirapongphan has said the contract with the PTTEP is expected to be signed in February and the company will have the right to explore and produce petroleum in the two fields for 20 years, with an option to extend its operations for another 10 years.
According to the PAER's statement, the country will not receive full benefits, given the seemingly limited number of bidders.
In this bidding, there should have been at least three bidders, however, the bidding conditions blocked chances of any other contestants to participate, including a stipulation that bidding firms must have shareholder's equity worth at least US$4 billion (131.2 billion baht) for the operation of the Erawan block and at least $2 billion in the Bongkot field.
The group said the bid condition also showed that it gave 65% weight to bidders who proposed to sell the lowest prices of extracted gas and 25% to profit-sharing they would give to the state.
Lower prices would benefit PTT, which in reality is the sole buyer of gas from both fields. The practice, therefore, helps the company reap more profits, which would be beneficial to the firm's shareholders, including foreigners who hold stakes, the PAER stated.
The group remains doubtful about claims that PTT would sell gas to the Electricity Generating Authority of Thailand (Egat) at low prices, which could help slash electricity bills by 29 satang per unit.
According to the PAER, the government's decision to skip its rights to hold a 25% stake in the concession stipulated in the bid documents is likely to run afoul of the law.
"Such an investment right is regarded as assets that have values and it is the government's right that should not be ignored," the group stated.
In regards to cooking gas to be produced by gas separation plants, the government is still setting the prices on par with imported gas, which does not reflect the actual cost, the group said, noting that people would have to shoulder expensive gas bills.
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