Thai Oil Plc demands resolution of unpaid wages at Chon Buri project

Thai Oil Plc (TOP) is urging the resolution of unpaid wage issues that have led to protests at its Clean Fuel Project (CFP) in Chon Buri, Thailand. The country’s largest oil refinery by capacity has called upon the parent companies of the construction firms involved to address the payment delays affecting workers on site.

TOP engaged the Unincorporated Joint Venture (UJV), a consortium consisting of Petrofac South East Asia Pte Ltd, Saipem Singapore Pte Ltd, and Samsung E&A (Thailand) Co Ltd, for the project’s execution. However, payment disputes have arisen as the subcontractors employed by these firms have not received their wages, despite TOP’s fulfilment of its payment obligations to UJV, as stated by Bandhit Thamprajamchit, chief executive and president of TOP.

An inquiry letter has been dispatched by TOP to UJV and its parent companies, demanding immediate action to resolve the issue, said Bandhit in a statement to the Stock Exchange of Thailand.

“UJV has assured us it will fulfil its payment obligations to the subcontractors.”

Bandhit suggested that if UJV is facing liquidity challenges hindering its ability to pay, the parent companies should step in to provide necessary financial support. The COVID-19 pandemic has reportedly impacted UJV’s management and construction activities from 2020 to 2022, exacerbating the situation.

In an attempt to remedy financial strains, UJV negotiated with TOP in 2021 for an increased budget and an extension of the construction timeline under the engineering, procurement, and construction (EPC) contract. Consequently, TOP sanctioned an amendment to the contract, granting an additional budget of US$550 million.

Since mid-July, workers have been protesting to demand their overdue wages, organising themselves under the Federation of Subcontractors of TOP Refinery, CFP Project, Si Racha, reported Bangkok Post.

The CFP, set to commence operations in 2025, aims to enhance the refinery’s capacity and output of high-grade oil products, including diesel and jet fuel. The project will produce diesel compliant with Euro 5 environmental emission standards.