Creating Shared Value
Creating Shared value is a management strategy in which the company enhance the competitive advantage and simultaneously advance society where it operates by addressing the needs and challenges with a business model.
PTTEP strategically applies the concept of “Creating Shared Value” to the existing social responsibility projects to create shared value between the Company and society for the sustainable operation. The review and screening process has been carried out to identify the proper project by focusing on PTTEP’s expertise and business network to support the targeted community or stakeholders.
Technical Capability Building and Development
Technical Capability Building and Development Project has been initiated as a result of the survey of available skilled labor in Myanmar and a consultation with the Skill Training Center, an internal organization under the Ministry of Labor, Employment and Social Security. It reveals that there are insufficient numbers of welders and air conditioning technicians. PTTEP therefore collaborates with Myanmar’s Ministry of Labor, Employment and Social Security to implement the project in 2015, with an aim to develop technicians for business and industry in Myanmar and abroad.
For the first phase (2015-2017), PTTEP renovated training building, procured equipment and organized training to upgrade the skill level of local artisans. Twenty two training sessions have been held for 613 participants in total. PTTEP also supports skills assessment by the National Skills Standards Authority (NSSA). And in 2017, the scope of training is expanded to provide support for electrical technicians.
Since inception to date, 30 training sessions have been held for 961 technicians and about 300 technicians have been assessed by NSSA. 80% of trained technicians have already been employed. In future, the technicians under this project may be employed to work for PTTEP.
The Flare Gas Utilization for Community Agricultural Product and Environment Project
In cooperation with the Department of Mineral Fuels, Ministry of Energy and Nong Toom Community in Kong Krailat District, Sukhothai Province located in Sirikit Field area, the biggest onshore oil field in Thailand, PTT Exploration and Production Public Company Limited (PTTEP) implemented a corporate social development project to strengthen villager career, increase community income and support quality of life improvement for people in the community.
The Nong Toom Model proves that Oil and Gas company and communities in operations area can live harmoniously. PTTEP delivers the excess associated gas from the Nong Toom Outstation, its Crude Oil Production Station, located 1 kilometer away from the community to serve the Flare Gas Utilization for Community Agricultural Product and Environment Project.
PTTEP supports the construction of Product Processing Buildings along with an installation of gas transportation system for the Nong Toom Agricultural Product Processing Center. The excess associated gas which is sold to the Nong Toom Banana Processing Cooperative at the lower price than market rate of Liquefied Petroleum Gas (LPG) serves the Community’s need of large amount of cooking gas to process their agriproducts. Apart from reduction of Community’s cooking gas cost by 50%, this project helps solving environmental problem, maximizes the energy utilization and fulfills community needs.
PTTEP installs one kilometer gas transportation system from Nong Toom Outstation to the Nong Toom Agricultural Product Processing Center in area of 4.74 acres (12 rais) and constructs 4 Product Processing Buildings for 240 cooking stations with public utility system as well as the connecting system from main gas pipeline to the cooking stations at total budget of Thai Baht 60 Million.
Nong Toom Outstation located in Kong Krailat District, Sukhothai Province, production of which started in 1999, has current accumulated oil production of 2,749,006 Barrels and 11,806 Million Standard Cubic Feet (MMscf.) for accumulated natural gas production as of March 2019. At present, the oil production is at 238 barrels per day and 1.068 Mmscf. for natural gas production per day. In addition, this project also helps reducing greenhouse gas emissions more than 5,000 tons annually.
Gas is transported via pipeline from Nong Toom Outstation to the Nong Toom Agricultural Product Processing Center as shown in flow chart below:
To comply with safety standard and ensure the accuracy of sales gas volume, PTTEP monitors the gas metering unit at the Nong Toom Agricultural Product Processing Center and submits the Sales Gas Calibration Report to the Department of Mineral Fuels on a monthly basis while a representative from the Nong Toom Banana Processing Cooperative Limited participates as an observer.
Location Map of the Nong Toom Agricultural Product Processing Center and Nong Toom Outstation
Twenty eight households in Nong Toom community, Kong Krailat District, Sukhothai Province set up the Nong Toom Banana Processing Cooperative Limited in 2007. Currently, the Cooperative produces agriproduct such as banana, pumpkin, cassava and taro fritters at the capacity of 60 tons per day.
Cost Saving and Revenue Generating
The Flare Gas Utilization for Community Agricultural Product and Environment Project is counted as the authentic Creating Shared Value (CSV) project that initiates value for both Nong Toom Community and PTTEP. It helps solving environmental problem and reducing the Cooperative’s cost of cooking gas by 50%.
In 2018, the Cooperative is able to save cost of cooking gas at the amount of Thai Baht 34 Million or USD 1 Million (compared to market price of LPG). Instead of burning the excess gas at Flare stack, PTTEP makes it to be a low cost cooking gas for the Cooperative which in turn generates income for PTTEP at the approximate amount of Thai Baht 6.59 Million or USD 199,811.
PTTEP has carried out analysis on Social Return on Investment (SROI) of this project by measuring the social impact of the program with the financial quantification calculation (monetization). This method is intended to measure the value of the financial impact of the program that compares to the value of the impact to the cost of the program that has been invested into. It appears that the value of the SROI ratio is 1.64: 1