Latest news with #SarathRatanavadi
International Business Times
2 hours ago
- Business
- International Business Times
Thailand's Gas Gamble: How Policy Missteps and Private Gains Drive Up Power Bills
In a nation where more than two-thirds of electricity is generated by gas-fired plants, Thailand's deepening reliance on expensive liquefied natural gas (LNG) imports is not just an energy strategy—it's a growing burden on its people. As global LNG prices spike and domestic gas output dwindles, questions are mounting over whether energy policy mismanagement and elite profiteering have come at the expense of the average Thai household. At the center of this complex web lies Gulf Energy Development Public Company Ltd., a powerful conglomerate helmed by Thailand's richest man, Sarath Ratanavadi. Together with the state-owned PTT Group, Gulf has secured long-term rights to import, store, and distribute LNG under lucrative government contracts. And while energy prices for consumers rise, so too do the profits of these well-connected corporate giants. The Cost of Policy Paralysis The roots of the crisis trace back to delays and dysfunction in the management of Thailand's domestic gas fields. The Erawan and Bongkot concessions in the Gulf of Thailand—once key pillars of the country's energy independence—saw production plummet following administrative upheavals. Chevron, which had operated Erawan since 1981, was ousted in 2021 in favor of a state-backed bidder, PTTEP. The handover was anything but smooth. By 2022, output from Erawan had dropped by over 50%. Despite promises from successive energy ministers to fast-track exploration and development, a combination of bureaucratic gridlock and deliberate policy choices has led Thailand to import nearly a third of its gas as LNG, compared to under 5% in 2011. These LNG imports are often priced at two to seven times more than domestically produced gas. In 2022, LNG hit a jaw-dropping $38.66 per million BTU, while Thai-sourced gas was only $5.51. The Institute for Energy Economics and Financial Analysis (IEEFA) reports that LNG imports surged 34% in 2023 alone. The financial toll on Thailand's state utility, EGAT, has been staggering—losses of 150 billion baht ($4.3 billion) between late 2021 and the end of 2022. A Tale of Two Winners: Gulf and PTT Gulf Development, once a challenger to PTT's monopoly, now appears to be its most strategic partner. The two firms jointly operate the Gulf MTP LNG Terminal, one of the country's main LNG import facilities. The terminal's capacity is set to double from 5 to 10.8 million tons annually. Gulf was granted its import license in 2020, becoming only the second private player after EGAT. Since then, the firm has expanded its influence across the LNG supply chain—from procurement to regasification to pipeline distribution. Critics argue that the system has been gamed to benefit a handful of actors. Two senior officials within the Energy Regulatory Commission (ERC), which oversees procurement policy, previously held advisory or executive roles at Gulf and PTT. The appearance of conflict of interest has eroded public trust in regulatory oversight. "This is a classic case of regulatory capture," said an IEEFA analyst who requested anonymity. "You have regulators with corporate ties making decisions that steer the country toward imported gas, which just happens to benefit their former—or future—employers." The Public Pays the Price The fallout is increasingly visible in Thai households and businesses. Electricity prices have remained elevated despite a fall in global LNG prices in 2024. EGAT, which purchases over 85% of Gulf's power output, absorbs the higher input costs, eventually passing them down to consumers. Small businesses, already recovering from the pandemic, have seen utility bills cut into margins. Rural provinces have protested rolling blackouts and unaffordable tariffs. Meanwhile, Gulf's profits have soared, bolstered by long-term contracts and a guaranteed buyer in EGAT. The government's response has been muted. While officials acknowledge rising costs, they continue to cite energy "security" and global volatility as justification for their reliance on LNG. Yet, a growing chorus of energy economists and civil society groups argue that the crisis is self-inflicted. "Thailand had the resources," said Dr. Nakornthap, a respected energy expert. "What it lacked was the political will and administrative competence to develop them." What Lies Ahead With elections on the horizon and household discontent simmering, energy policy is emerging as a political flashpoint. Some opposition leaders are calling for a full audit of LNG contracts and regulatory appointments. Others propose reforms that would prioritize domestic exploration and overhaul procurement transparency. As the Thai people pay for these missteps at the meter, the broader lesson may echo beyond Bangkok: in energy policy, inaction and insider influence can be just as costly as imported gas.
Forbes
14 hours ago
- Business
- Forbes
Groups Backed By Thai Billionaires Dhanin, Sarath, Win Virtual Bank Licenses
Mobile banking is one of the services to be provided by virtual banks. Three groups backed by energy-to-telecommunications tycoon Sarath Ratanavadi, billionaire Dhanin Chearavanont's Charoen Pokphand Group and an international consortium led by Siam Commercial Bank's SCB X won permits to establish virtual banks in Thailand, the central bank announced on Thursday. The Bank of Thailand hopes the entry of new players would boost innovation in the banking industry and stimulate competition, while maintaining the country's financial stability. The virtual banks are expected to start their commercial operations within one year from the issuance of the licences. Establishing a virtual bank is a major diversification move for Charoen Pokphand, Thailand's largest conglomerate with interests in agribusiness, food, retail, e-commerce, fintech, media, real estate and telecommunications. CP Group is the main source of wealth for Dhanin Chearavanont and his family, whose net worth of $29 billion makes them the country's second wealthiest. For Sarath, a virtual bank is a natural extension of his Gulf Development's ventures in digital infrastructure such as data centers and crypto currency exchange. The project will be implemented by his Advanced Info Service, the nation's second biggest mobile carrier. Sarath has a real-time net worth of $11.1 billion. SCB X, meanwhile, has roped in digital banks such as China's WeBank and South Korea's Kakao Bank, a unit of billionaire Kim Beom-su's Kakao messaging app, to help it build a digital bank in Thailand. Although virtual bank operations can provide long-term opportunities for those getting the licenses, any immediate impact will likely be limited since they will need to book substantial investment and operating losses in the initial stage. 'We are of neutral view with this development because any material benefit will not be seen within the next five years,' Piriyapon Kongvanich, investment strategist at Bangkok-based Bualuang Securities, said. 'As earnings bases of those involved are massive, it will be difficult for future profits from the virtual bank businesses to push an uptick in their bottom lines.'
Entrepreneur
22-05-2025
- Business
- Entrepreneur
Gulf Development Increases Stake in Kasikornbank to $610 Million
Gulf Development PCL has significantly increased its investment in Kasikornbank PCL, acquiring a stake worth approximately $610 million. The move positions Gulf Development as the third-largest shareholder in the commercial... This story originally appeared on Calendar Gulf Development PCL has significantly increased its investment in Kasikornbank PCL, acquiring a stake worth approximately $610 million. The move positions Gulf Development as the third-largest shareholder in the commercial lending institution. The company, controlled by Sarath Ratanavadi, Thailand's wealthiest individual, has strategically expanded its financial portfolio through this substantial investment in one of Thailand's major banking entities. Strategic Investment in Thailand's Banking Sector This investment represents a notable shift in Gulf Development's holdings and signals potential interest in diversifying beyond its traditional business areas. By securing the position of the third-largest shareholder, Gulf Development gains significant influence within Kasikornbank's corporate structure. Financial analysts view this move as part of Ratanavadi's broader strategy to strengthen his business empire's presence in Thailand's financial services sector. Thailand's banking industry has shown resilience despite economic challenges in recent years, making it an attractive investment target for major business groups. Ratanavadi's Growing Business Empire Sarath Ratanavadi has built his fortune primarily through energy and infrastructure investments. His main business vehicle, Gulf Energy Development, has established itself as one of Thailand's largest private power producers. The billionaire's business approach typically involves: Strategic investments in essential infrastructure Diversification across complementary sectors Building minority stakes before increasing influence This latest investment in Kasikornbank follows a pattern of calculated moves into various sectors of the Thai economy, allowing Ratanavadi to expand his influence across multiple industries while managing risk through diversification. Implications for Kasikornbank For Kasikornbank, having Gulf Development as a major shareholder brings stability and potential new business directions. The bank, which ranks among Thailand's largest financial institutions, may benefit from stronger connections to Gulf's industrial and energy clients. Banking experts suggest this investment could enhance cooperation between Kasikornbank's financial services and Gulf Development's extensive business network. Such synergies might include preferential financing for Gulf-related projects or joint ventures in financial technology. This investment creates opportunities for both organizations to leverage each other's strengths,' noted a Bangkok-based financial analyst familiar with the transaction. The $610 million stake represents a substantial financial commitment and demonstrates strong confidence in Kasikornbank's long-term prospects and management. As Thailand's economy continues to evolve, this partnership between one of the country's wealthiest business leaders and a significant financial institution may shape future developments in both the banking sector and the broader Thai economy. The transaction also highlights the ongoing trend of industrial conglomerates increasing their stakes in financial services companies across Southeast Asia. The post Gulf Development Increases Stake in Kasikornbank to $610 Million appeared first on Calendar.
Business Times
19-05-2025
- Business
- Business Times
Richest Thai man raises top bank's stake to be No 3 shareholder
[BANGKOK] Gulf Development, controlled by Thailand's richest man Sarath Ratanavadi, has raised its stake in Kasikornbank to about US$610 million, making it the commercial lender's third-largest shareholder. Gulf increased its holding of Kasikornbank by 0.53 per cent from the previous disclosure to 5.23 per cent, according to a Securities and Exchange Commission statement dated May 16. The power producer and telecommunication company had ranked fourth with a 3.49 per cent stake as at Apr 18 when the lender published its top shareholder list. Sarath's Gulf last month completed the merger with Intouch Holdings, the top shareholder in Thailand's second-biggest telecom company Advanced Info Service. The company has a market capitalisation of about US$22 billion. Kasikornbank's share purchase by Gulf is part of its 'normal investment', aimed at generating higher capital gains and dividend, Gulf chief financial officer Yupapin Wangviwat told an investor meeting last week. Gulf has no plan for any close business operation with the bank in the near future, she said. Sarath built Gulf into Thailand's largest power producer and gained control of Intouch by gradually accumulating a 47 per cent stake. Sarath last week met with US President Donald Trump in Qatar, making him the only representative of a Thai business to do so, according to a Bangkok Post report. Sarath has a net worth of about US$12.9 billion, according to data compiled by Bloomberg. Kasikornbank is Thailand's second-biggest lender with total assets of 4.4 trillion baht (S$172 billion). Its shares are up about 5.5 per cent this year, bucking a 15 per cent slump in the broader Thai stock benchmark. Gulf and its partners are among the group which have bid for the Bank of Thailand's new virtual banking licenses. BLOOMBERG
Bloomberg
19-05-2025
- Business
- Bloomberg
Richest Thai Man Raises Top Bank's Stake to Be No. 3 Shareholder
Gulf Development Pcl, controlled by Thailand's richest man Sarath Ratanavadi, has raised its stake in Kasikornbank Pcl to about $610 million, making it the commercial lender's third-largest shareholder. Gulf increased its holding of Kasikornbank by 0.53% from the previous disclosure to 5.23%, according to a Securities and Exchange Commission statement dated May 16. The power producer and telecommunication company had ranked fourth with a 3.49% stake as of April 18 when the lender published its top shareholder list.
