Pundit urges reforms in petroleum sector

Thailand's energy sector may face supply shortages unless new regulations are put in place to attract foreign investment, according to Kurujit Nakornthap, executive director of the Petroleum and Energy Institute of Thailand. The country's upstream petroleum sector remains plagued by complex regulations, which deter multinational oil companies from investing.

Investors must navigate a maze of approvals to access drilling areas, often encountering additional fees and multiple government agency coordination requirements. Existing fields are aging, with decommissioning costs further dissuading new investors. Thailand's licensing framework allows only one 10-year renewal, forcing operators to re-enter bidding afterwards, often delaying projects.

The lack of reform could force Thailand to rely more on expensive liquefied natural gas (LNG) imports, potentially raising electricity prices for consumers. Thailand has not discovered new petroleum sources since 2005, and key auctions have stalled or not progressed due to political changes. Without regulatory modernization, Thailand risks losing regional energy industry competitiveness and facing higher domestic energy prices.