Siri Jirapongphan, executive director of the Petroleum Institute of Thailand, said PTT Plc has agreed to act as a centre to garner crude oil and condensate from big local production blocks.
Local resources are mainly in the Gulf of Thailand and include the Benchamas, Pattani, Bualuang and Songkhla blocks.
The national oil firm will be tasked with blending locally produced crude with imported crude to meet standards as required by oil refineries.
In the past, Thailand exported a portion of crude oil whose quality failed to match refinery specifications. Prices were significantly higher than for imported oil as a matter of economies of scale.
Dr Siri said most local production is relatively small compared with Middle East production. This has led local refineries to prefer importing crude from the Middle East instead of buying from the Gulf of Thailand.
Dr Siri said PTT and the Mineral Fuels Department have agreed to cut petroleum exports sourced locally from 35,000 barrels per day at present to zero by next year’s third quarter.
Thailand now produces crude oil and condensate in the amount of 207,000 bpd, while domestic demand is 800,000 bpd.
The two parties are committed to reducing the volume of exports to 25,000 bpd this year and 20,000 bpd by next year’s first quarter.
In a bid to stabilise the oil supply, the Petroleum Institute has proposed the government set up a sovereign fund to finance the purchase of petroleum resources around the world.
“Singapore’s government has already set up a state-sponsored investment corporation to secure energy resources for two decades and beyond,” said Dr Siri.
The institute forecasts a doubling of Thailand’s oil imports to 2 trillion baht a year if domestic oil resources run out.