Experts call on Thai govt to prioritise OCA negotiations with Cambodia

They argue that a joint development of the OCA could significantly bolster the country's energy security and stability.

Speaking at the Thansettakij conference on Wednesday, panelists unanimously emphasised the importance of maintaining the 2001 Memorandum of Understanding (MOU44). They argued that a collaborative approach to the OCA would not only provide a reliable backup energy source but also foster a market-based pricing mechanism that would benefit both producers and consumers.

The OCA, a 26,000-square-kilometre area, is believed to hold significant oil and gas reserves, estimated at up to 500 million barrels. While Thailand and Cambodia signed an MoU in 2001 to jointly develop parts of the OCA and demarcate a maritime border, progress has been hindered by disputes over the maritime boundary.

Fair, not low, energy prices needed

Dr Areeporn Asawinpongphan from the Thailand Development Research Institute (TDRI) highlighted the detrimental impact of prioritising low energy prices over a sustainable and balanced energy market. She warned that such a short-sighted approach could lead to significant economic burden, as evidenced by the recent surge in global LNG prices.
 

To address these challenges, the TDRI has proposed four key strategies:

• Energy efficiency: Promoting energy conservation measures and prioritising energy efficiency programmes over new power plant construction.
• Price restructuring: Reforming electricity pricing mechanisms to better reflect actual costs, particularly fuel costs, and to reduce reliance on volatile LNG imports.
• PDP review: Reviewing the Power Development Plan (PDP) to identify and eliminate unnecessary power plant projects, especially those based on overly optimistic demand forecasts.
• Clean energy focus: Accelerating the transition to clean energy sources while recognising the need for natural gas as a bridge fuel, particularly from the OCA.

The role of the OCA

Kurujit Nakornthap, director of the Petroleum and Energy Institute of Thailand, echoed the importance of the OCA. He said the OCA could provide a significant source of natural gas, reducing reliance on LNG imports and mitigating price volatility.

To unlock the potential of the OCA, Thailand and Cambodia must continue negotiations on demarcation of the maritime boundary and the establishment of a joint development area. This would involve defining the scope of the joint development, sharing costs and benefits, and agreeing on concession terms, organisational structures, and legal frameworks.

According to Areeporn and Kurijit, by prioritising the OCA negotiations and implementing comprehensive energy reforms, Thailand can secure its energy future, lower consumer costs, and contribute to a more sustainable and resilient energy landscape.