DSI, SEC urged to probe Thai Oil’s tanked THB160-bn clean fuel project
Chief of consumer network warns listed company risks bankruptcy because of the actions of some execs
A consumer network on Wednesday submitted a request to the Department of Special Investigation (DSI) and the Securities and Exchange Commission (SEC) to investigate executives of Thai Oil Pcl and related parties for possible violation of the Securities and Exchange Act and other laws.
The case involves a failed clean fuel project of Thai Oil, a listed subsidiary of national oil and gas conglomerate PTT Plc engaged in the oil refinery business.
The request was submitted by Chatchanai Panphet, the network’s representative and one of the individuals affected by the project.
In 2018, Thai Oil invested US$4.82 billion (159.22 billion baht) in a clean fuel project, promising an interest of $151 million (4.98 billion baht) throughout the period of five years.
The company claimed that the project, which involved turning fuel oil into diesel and aviation fuel, would help reduce the cost of oil refining and increase Thai Oil’s capacity in refining heavy crude oil by 40-50%.
Chatchanai said Thai Oil awarded the project to Petrofac International (UAE) Llc, Samsung Engineering Ltd, and Saipem SPA via bidding. The project used a production technology called LC-Max, which had not undergone a full feasibility study or evaluation of commercial viability, as it was a new technology at the time, he said.
Currently, the three contractors have defaulted on paying compensation totalling over 6 billion baht to 28 subcontractors for eight months now, resulting in them suspending the project construction indefinitely, said Chatchanai.
“It is apparent that the project has failed and cannot be finished by the February 2025 deadline,” he said. “Trying to continue the project might cost even more money and push the total investment to over 300 billion baht.”
The project’s failure has driven the total debt of Thai Oil to over 100 billion baht and could even drive the company into bankruptcy, Chatchanai warned.
He blamed the project’s failure on a lack of vision and discretion among Thai Oil executives, causing substantial damage to the company which has over 39,000 shareholders.
He urged the DSI and the SEC to investigate the actions of Thai Oil executives and related parties and pursue appropriate legal steps.
