Thai Oil comments on labour protests at TOP refinery in Sriracha
Thai Oil denies that the incident has led to an indefinite postponement of the CFP project's commencement
Media reported on October 21 that a gathering on October 18 of the Federation of TOP Refinery Contractors, CFP Project Sriracha in front of the Thai Oil refinery in Sriracha, Chonburi province, has led to the indefinite postponement of the Clean Fuel Project’s commencement.
Additionally, media reported that the project’s main contractors – a joint venture among Samsung E&A (Thailand) Co Ltd, Petrofac South East Asia Pte Ltd, and Saipem Singapore Pte Ltd (UJV – Samsung, Petrofac, and Saipem) – have faced significant financial-liquidity issues in executing the Clean Fuel Project. This has caused delays in compensating subcontractors.
Thai Oil said it has been conducting studies for the CFP project since 2014 and has verified the qualifications of bidders following a transparent procurement process, resulting in the selection of the following companies: 1. Petrofac International (UAE) LLC, 2. Samsung Engineering Co Ltd, and 3. Saipem SPA. These companies signed the EPC contract with Thai Oil in 2018.
Thai Oil learned from some subcontractors in April this year that UJV – Samsung, Petrofac, and Saipem were not making timely payments to certain subcontractors, citing operational liquidity issues, even though Thai Oil had made complete payments to UJV – Samsung, Petrofac, and Saipem.
Thai Oil says the gathering of the federation in front of the refinery in Sriracha has impacted Thai Oil's operations in that area. However, it has not resulted in the CFP project being postponed indefinitely.
Thai Oil says it is aware of the difficulties faced by the federation due to the non-payment of outstanding compensation. The company has made every effort to encourage UJV – Samsung, Petrofac, and Saipem to settle the outstanding payments to subcontractors in accordance with the contracts.
This includes agreeing to allow UJV – Samsung, Petrofac, and Saipem to collect payments from Thai Oil based on the actual progress of work, rather than on the completion of each portion of the project. Thai Oil says it has also pushed for the prompt payment of wages within the contractually specified timeframe to support financial liquidity.
Furthermore, Thai Oil has requested UJV – Samsung, Petrofac, and Saipem to agree to allow it to deduct payments under the contract to pay subcontractors directly. However, UJV – Samsung, Petrofac, and Saipem have not yet consented to this.
Thai Oil has confirmed its commitment to conducting business in accordance with governance principles and aims to complete the CFP project as quickly as possible while considering the interests of all stakeholders.
Thai Oil says it will continue to push UJV – Samsung, Petrofac, and Saipem to pay the outstanding compensation to subcontractors as stipulated in the contracts between UJV – Samsung, Petrofac, and Saipem and each subcontractor.
