Thaioil has called on UJV – Samsung, Petrofac and Saipem, the main contractors, to expedite payments to subcontractors and complete the CFP construction contract as planned. It also explained that during the COVID-19 outbreak, the EPC contract was amended to provide an additional budget of 550 million US dollars.
In the case where the media reported that Saipem, one of the companies in the joint venture between Samsung E and A (Thailand) Co., Ltd., Petrofac South East Asia Pte. Ltd. and Saipem Singapore Pte. Ltd. (collectively referred to as ‘UJV – Samsung, Petrofac and Saipem’), which is the main contractor of Thai Oil Public Company Limited’s CFP project, will withdraw from UJV due to losses, as UJV agreed to a low price of only approximately 100 billion baht, compared to the actual price of 140 billion baht, Thai Oil Public Company Limited clarified that such information is incorrect and may cause material misunderstanding in the operations of Thai Oil, a company listed on the Stock Exchange, in a manner
that may affect the price of securities or investment decisions in securities.
Thaioil explained that since the CFP project is a high-value project, Thaioil places great importance on transparency, the procurement process must be clear in every step, internal audits by appointing independent observers, and applying the Integrity Pact approach. The independent observers will participate in observing every step of the bidding process and are independent in order to report the performance results and observations directly to the Company’s Board of Directors.
In the bidding process for the CFP EPC contractor, in addition to considering the suitability of the bidders, Thaioil has provided an explanation of the project information, details of the necessary and beneficial scope of work for the bidders, and provided an opportunity for each bidder to thoroughly survey the project construction site in order to assess the project plan and value before each bidder submitted a project proposal. Each of the participating
companies is a reputable company with specialized expertise and experience in large-scale projects. The bidding is a lumpsum contract, and Thaioil is confident that each bidder will present a price that is confident that the CFP project will be successful.
The bidding result shows that 1. Petrofac International (UAE) LLC, 2. Samsung Engineering Co., Ltd., and 3. Saipem SPA were selected and entered into the EPC contract with Thaioil. Therefore, Saipem, which is one of the contracting parties with Thaioil, cannot withdraw from the contract. In addition, Thaioil has always complied with the contract. After the construction of the CFP project began, the COVID-19 outbreak occurred in many countries in 2019 and began to have a significant impact on the management and construction of the CFP project by UJV – Samsung, Petrofac and Saipem from 2020 to 2022. Therefore, in 2021, UJV – Samsung, Petrofac and Saipem began negotiating with Thaioil to increase the budget in the EPC contract and extend the delivery period o
f the CFP project, which Thaioil has carefully considered in accordance with ethical principles. Therefore, the EPC contract amendment was approved with an additional budget of 550 million USD.
Thaioil would like to confirm that Thaioil has made every effort to push UJV – Samsung, Petrofac and Saipem to pay the outstanding remuneration to the subcontractors. It has sent letters to inquire UJV and the parent companies of UJV – Samsung, Petrofac and Saipem about the measures to manage the subcontractors who have not received payment, including the payment plan for the outstanding remuneration. If UJV – lacks liquidity and cannot pay the outstanding remuneration, the parent company, as the issuer of the EPC performance guarantee, must provide financial assistance to UJV. UJV – Samsung, Petrofac and Saipem confirm that they will pay the outstanding remuneration according to the terms of the subcontracting contract. In addition, Thaioil has been informed not to interfere with the subcontractors because Thaioil is
not a party to the subcontracting contract. Therefore, the duty to pay the remuneration under the subcontracting contract is the responsibility of UJV – Samsung, Petrofac and Saipem, which must be directly responsible.
Thaioil adheres to the principles of corporate governance, conducts business transparently, and takes into account ethics and the impact on shareholders and all stakeholders. It has paid compensation to UJV in full according to the EPC contract period in order for the construction of the CFP project to be completed and run smoothly. -511 Thai News Agency
Source: Thai News Agency