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PTTPLC Internet Site | Home | Sustainability | PTT Sustainability | Governance of Sustainability
Risk & Crisis Management
Risk Management
Risk management constitutes a critical element in all of PTT’s business operations and is connected to all business levels. PTT therefore established the Enterprise Risk Management Policy for all PTT employees to adhere to, and appointed the Enterprise Risk Management Committee (ERMC) to formulate policy, implement the risk management framework, and govern and support organizational risk management to ensure alignment with business strategy and goals under various changing conditions. The Committee also serves to provide guidance, monitor performance, and report risk assessment results to the Risk Management and Internal Control Committee (RMCC) in order to ensure maximum effectiveness and progress in accordance with the principle and management approach of the PTT Way of Conduct. Issues are also reported to the Audit Committee (AC) to verify the risk management system and to provide guidance for improvements.


PTT’s risk management framework and risk management procedures correspond with the criteria of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), Enterprise Risk Management (ERM), and ISO 31000 Risk Management – Principles and Guidelines, all of which are international standards for relevant parties to understand the risk management principles and to apply them appropriately. Corporate risks are systematically managed through committees within specified scopes and responsibilities. All business functions have the responsibility to
manage and maintain risks at a manageable level.
Corporate Risk Profile
PTT’s risk management process is designed to be integrated with components from each step of the organization’s strategic planning process. Every year, PTT analyzes and assesses risks to develop the Corporate Risk Profile, which corresponds to corporate targets and strategic plans and incorporates expectations from different stakeholder groups, economic trends, political conditions, as well as significant socioeconomic and environmental factors. These risks can be categorized as strategic risk, business risk, operational risk and financial risk – all of which pose potential impacts to PTT’s performance, employees, customers, suppliers, organizational reputation, the general public and the environment. In addition, PTT takes into consideration event risks, emerging risks, and PTT Group Black Swan Events. Risk owners have the responsibility of formulating risk management plans for such risks, defining Key Risk Indicators (KRIs), and
monitoring and reporting results to the Enterprise Risk Management Committee, the Risk Management and Internal Control Committee, and the Audit Committee in accordance with PTT’s defined procedures.
Furthermore, PTT assesses risks using assumptions based on various uncertainties, such as global economic conditions, Thailand’s Politics and Economy, exchange rates, and demands for energy reform. The PTT Group Financial Stress Test will be conducted in the case that crises emerge from such uncertainties so as to prepare and manage those risks.
PTT anticipates that emerging risks in the near future will focus on natural gas production. Given that, in addition to uncertainties in the volume of natural gas reserves available in the country, current trends also indicate an increase in the costs of developing natural gas reserves and petrochemical bases, as well as an increase in natural gas prices concurrent with a decrease in production volume. This would likely result in the reduced production capacity of PTT’s Gas Separation Plant, preventing its ability to meet domestic demand. Moreover, technological advancements in finding economically viable alternative energy sources might impact the competitiveness of natural gas compared to other types of energy. Such factors would impact PTT’s ability to deliver sustainable energy for the country.


Business Continuity Management
With PTT’s commitment to securing energy for Thailand, protecting business operations, and maintaining the trust, safety and security of all its stakeholders, PTT has developed the Business Continuity Management System (BCMS) according to the PTT Group Business Continuity Management System Standard, which is based on the ISO 22301 and other relevant standards. The system, governed by the RMCC, covers protection, response, management, and recovery, and is divided into 3 phases: prevent/prepare; response/resume; and recovery/restore.
Continuously changing conditions pose a challenge for PTT, where unexpected events as natural disasters, terrorism, and various threats could affect PTT’s ability to meet its business objectives and disrupt operations, resulting in the loss of assets or lives and extensive impacts on stakeholders. Without the capacity to restore business to normal operations, the corporation may not survive. In such circumstances, PTT gives priority to setting coordinated corporate management strategies that include mitigation measures, preparedness, and the promotion of awareness and responsibility in accordance with the BCMS.


PTT has formulated a safety and emergency response plan, broken down into 4 levels based on extremity of the event. Level 1 refers to an event that PTT can respond to on its own, and which will be managed by the Emergency Command Center (ECC) set up to resolve emergency events. In case of events where PTT requires help from external parties at the local, provincial, or national levels, the emergency event will be upgraded to Levels 2, 3 and 4, respectively, and the Emergency Management Center (EMC) or Crisis Management Center (CMC) will be set up to handle conditions as appropriate. A responsible person is identified and authorized to manage events at each level to ensure effective resolution and efficient response to both public and private agencies and neighboring communities. PTT believes that by implementing such protective measures and developing mechanisms to help manage operations and ensure continuity in
times of crisis, the organization will be able to continue building confidence among stakeholders and create a competitive advantage over the long-term.


For additional information, please visit: Risk and Crisis Management and Business Continuity Plan  (Available in Thai only). 


Emerging Risk

Reported uncertainties and trends, for example, declining of natural gas reserves, increasing development cost and technological improvement of alternative energies could deteriorate the competitiveness of natural gas to become less attractive to alternative resources. These factors are crucial to the long-term growth of PTT Group and its ability to provide energy security for the country in the future.

Growing popularity in the use of electric vehicles (EVs) for transportation gets more attention worldwide because of zero carbon emission due to technologically advanced engines. In Thailand, EVs would support the use of alternative energy in case of energy shortage and future declination in fossil fuels, which aligns with the Thai Alternative Energy Development Plan. In response to shifts from internal combustion vehicles to EVs, PTT has been exploring signals of emerging risks and preparing for changes due to the use of EVs by considering many aspects i.e. technological change risks, regulatory risks, financial risks and safety risks.

Regarding EVs trend, PTT conducts the risk and opportunities assessment for long-term business, especially for emerging risk signals. Expansion of EVs may have no meaningful impact on crude oil demand in the short term but it may be expected to have a substantial impact on crude oil demand, and the crude oil price, in the medium term. These may have direct impact along PTT’s business value chain, especially in investment projects in Upstream Business, Refining Business and Oil Marketing Business in terms of losing the market share, while growth of gas demand in power sectors will be the opportunities for PTT’s Gas Business and new businesses in alternative energy sources or related EV industry.

In the future, Thailand will witness an increasing trend in the use of electric vehicles. To meet this anticipated demand, PTT has studied systems and standards associated with electric charging stations, and constructed 6 electric vehicle charging stations. The objective of these stations is to enhance public awareness on electric vehicles, and advance further knowledge on these services from real-life application. Furthermore, PTT expected that the results of the EV Charging Station Project will be a part of key success factors driving EVs for transportation sector in an environmentally efficient manner, reducing the amount of fuel to be imported from abroad, replacing natural gas reserves declination and leading Thailand into a low-carbon society.