Former finance minister Thirachai Phuvanatnaranubala says the government's new bidding round for petroleum exploration and production concessions will not bring about national energysecurity.
Thirachai: Caption
Mr Thirachai said the government will lose ownership rights to indigenous petroleum products once the concessions are granted to petroleum business operators.
Mr Thirachai is critical of the Prayut Chan-o-cha government for pressing ahead with bidding for the 21st petroleum concession.
The energy concession bidding was announced by the Energy Ministry in September.
Under the 21st petroleum concession bidding announcement, 29 blocks of exploration fields —23 onshore (17 in the Northeast and six in the North and Central Plains) and six offshore (all in the Gulf of Thailand) — will be granted to investors through bidding. Bidding applications are open until Feb 18.
Mr Thirachai said that according to Section 23 of the Petroleum Act, petroleum belongs to the state and no one can explore for it or produce petroleum in any area without a concession.
However, Section 56 says the concessionaires shall hold the right to sell and dispose of the petroleum products which they produce.
"As a result, once the government grants a concession, ownership rights to the petroleum products are lost from the government's hands. The clause saying 'petroleum belongs to the state' is only an abstract," he said.
"The reality is that concessionaires hold all the rights to sell and distribute petroleum produced from the state-granted concession."
He said that according to the concession document of the Department of Mineral Fuels, all petroleum under the concession belongs to concessionaire.
This is different from the production sharing system adopted in several other countries which says production petroleum belongs to the "host state".
This means the state loses the authority to intervene in the sale and distribution of petroleum controlled by concessionaires.
"As a result, how does the concession granting system ensure energy security as claimed by the government?" Mr Thirachai said.
Deputy government spokesman Sansern Kaewkamnerd said Gen Prayut had told the Energy Ministry to listen to all opinions.
The National Reform Council (NRC) voted last week against the 21st petroleum concession granting. Mr Sansern said the NRC did not suggest the process of building energy reserves be stopped but suggested the government consider what is the most appropriate approach.
He said the government wants to go ahead with its bids with the "Thailand 3-plus" system, the system earlier suggested as an alternative by the NRC's committee on energy reform.
The system will allow the state to gain more benefits from concessions. Apart from concession fees and taxes, the country will receive special payments from concessionaires if their production is higher than the designated ceiling.