Petroleum bills pass amid opposition

Petroleum bills pass amid opposition

Activists say changes do not go far enough

The government-sponsored petroleum bill and petroleum income tax bill sailed through their first reading on Friday in the National Legislative Assembly (NLA) amid strong opposition from energy reform activists.

Members of the NLA voted 152 against five and 154 against two to pass the revised Petroleum Act and the revised Petroleum Income Tax Act, which would allow for production-sharing contract (PSC) and service contract (SC) systems as alternatives for benefit sharing. The move would pave the way for Thailand to proceed with exploration and production plans and extend expiring licences. The 21st round of bidding for oil and gas exploration and production, which is a crucial part of the national energy plan, is pending passage of the bills.

The proposed amendments were in response to energy reform activists who demanded the government replace the current system of awarding concessions to companies with alternatives that would allow society as a whole to benefit more from the petroleum business.

However, as the NLA members kicked off a debate on the legislative drafts, activists from the People's Alliance for Energy Reform, led by Parnthep Pourpongpan, gathered outside parliament hoping to see the bills withdrawn.

On Thursday, the group submitted a petition to NLA vice president Surachai Liangboonlertchai to demand that the bills be dropped. Despite changes made to the bills, the group found them unsatisfactory because they fail to include criteria for use to determine which benefit-sharing system is best and thus will open the way for exploitation. Addressing the NLA, Energy Minister Anantaporn Kanjanarat gave assurances that the amendments were in compliance with the energy reform agenda that seeks to secure future energy supplies and that they would better address management of petroleum resources.

The draft legislation would allow the government to consider PSC and SC systems as alternatives to managing petroleum resources while regulations governing rights or privileges of concession holders and royalty payments have also been improved, he said.

Gen Anantaporn said that no state agency is given "absolute" authority in the management of petroleum resources.

While NLA members spoke in favour of the draft legislation, some were concerned about how to ensure full public disclosure about future oil exploration and production contracts especially in the absence of the proposed National Oil Corporation.

Calls are being made for the government to set up a National Oil Corporation to manage upstream petroleum resources and pass a law to to justify its establishment. The corporation would be responsible for allocating petroleum exploration and production rights.

Gen Anantaporn said the ministry did not find the proposed corporation appropriate given that it conducted a study into the possibility of setting up a new agency. He said one of the concerns involved the authority of the proposed body.

NLA member Wallop Tangkhananurak, however, called on the NLA to withdraw the bills for further revisions, saying they did not answer the public's call for energy reforms. Another member, Monthian Boontan, echoed Mr Wallop's call, saying the new systems were about to be added while the structure remained unchanged and it was unclear who would be responsible for management.

Mr Panthep blasted the Energy Ministry for pushing ahead with the bills. "Last year the prime minister told the NRC to conduct a study when transparency was in question. But today the ministry went ahead with its own version despite public scepticism," he said.

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