Junta to Order Oil Production Restarted on Protected Land

BANGKOK — A government spokesman said Tuesday the junta is preparing another volley of its extralegal authority to overturn a court ruling that barred petroleum exploration and production on land allocated for agricultural use.

The order, to be issued under the junta leader’s self-granted authority, will also authorize the use of land reserved for agriculture use for mining and the generation of wind energy, undoing a court decision that regime spokesman Sansern Kaewkamnerd said was costly for the state oil company.

The idea came after the Supreme Administrative Court’s June 1 ruling that land protected by the 1975 Agricultural Land Reform Act could not be used for other purposes – including petroleum exploration – as it went against their law’s principle of promoting farmers’ rights.

The ruling meant the Agricultural Land Reform Office had to revoke concessions granted to several companies, including the state-owned petrochemical enterprise.


The verdict halted operations by seven companies including PTT Exploration and Production Co. Ltd. (PTTEP on SET) – which are majority-owned by state oil company PTT.

Following the verdict, PTTEP had to stop operations in the Lan Krabue district of Kamphaeng Phet province on June 3 despite having been active there since 1982.

When the market opened June 5, the company’s market value dropped 3.61 percent from 90 baht to 86.75 baht – the largest decrease in four months. It closed Tuesday at 89 baht, up 50 satang.

PTTEP said halting production in the area it designates “S1” resulted in the loss of 15,000 barrels of petroleum production daily.

That appeared to bother junta chief Prayuth Chan-ocha. It was one of the issues – along with the high-speed rail project – he signaled last week would be solved by using his absolute power.

Government spokesman Sansern said Tuesday the production pause in Kamphaeng Phet’s Lan Krabue district resulted in daily losses between 40 million baht and 50 million baht.

“And where did this money go?” Sansern said. “It went to the government and some was distributed locally.”

“It affects the supply of energy in those areas that use energy produced in Lan Krabue,” he said. “And secondly, it affects investor confidence.”

Sansern insisted the order would only apply to the area had previously obtained permission from the Agricultural Land Reform Office. He said others who wanted to apply after the order was issued would be considered on a case-by-case basis.

However, Sansern’s statements contradicted those of the Agricultural Land Reform Office, who said PTTEP never received permission to operate there.


The office’s top executive Sompong Inthong said on June 9 that he planned to fine the company 20 million baht for operating there without seeking permission, according to Infoquest.

PTTEP responded that it had acquired a company which had obtained permission to the land prior to its being reserved for agriculture, according to Manager news.

PTTEP earned total profits of 1.89 billion baht last year, according to the Department of Business Development.