Cambodia Faces Offshore Oil Discovery
By KER MUNTHIT Associated Press Writer
The Associated Press
PHNOM PENH, Cambodia — Yin Sarik, a motorized rickshaw driver, thinks his daily struggle to eke out a living might be less stressful if gasoline prices fell below $1 a liter. He pins his hopes on oil reserves under Cambodia's seabed.
"I am praying for it to be pumped for use soon. Our country will also become prosperous," says the 31-year-old man, echoing the sentiments of poor and rich alike.
Impoverished Cambodia is buzzing with excitement about a recent oil discovery by U.S. energy giant Chevron off the southwestern coast, with the government hoping to use oil money to gradually rid the country of its "beggar state" status.
"It is not a pipe dream. The question is will the dream of oil turn into a nightmare of oil?" said U.S. Ambassador Joseph Mussomeli in an interview.
Referring to the "oil curse" experiences of other countries, Mussomeli's comments reflect deep concerns in Cambodia that the oil won't just pump out much-needed hard currency but will also worsen corruption now plaguing the country.
Exactly what lies beneath the seabed is still uncertain but Mussomeli estimated that oil production could generate well over $1 billion a year in revenue, although it might not begin until 2010.
He said the amount will be "an extraordinary jump" for a country that heavily relies on some $500 million a year from donors. Thirty-five percent of Cambodia's 14 million people live below national poverty line of 50 cents a day.
"It's a lot of money to pump into the system," he said. "If Cambodia can put in place the proper mechanisms for accountability and transparency for the oil revenue, then this country can change dramatically in the next decade."
If not, "it simply will make the corruption problem in Cambodia even worse," he said, adding "then the blessing will become a curse."
Cambodia's National Petroleum Authority has not released data about the reserves and Te Duong Tara, its director-general, didn't respond to a request for an interview.
Chevron is currently engaged in exploration drillings in Block A, a site about 140 kilometers (87 miles) southwest of the seaport of Sihanoukville. It holds 55 percent of the block, while Japan's Mitsui Oil Exploration Co. has 30 percent and Chevron's affiliate GS Caltex 15 percent.
Last year, Chevron discovered crude oil in four wells in the block and has plans to drill 10 more through 2007.
"Chevron is encouraged by its results to date in Cambodia," Nicole Hodgson, a Chevron's spokeswoman, said in an e-mail from Bangkok, Thailand.
Additional drilling will help the firm and its partners to "evaluate the true potential of the area," she said.
A joint study by the United Nations Development Program and Harvard University early this year provisionally estimated that just the explored part of Block A held 400-500 million barrels of oil and 3 trillion cubic feet of gas.
There are five other oil blocks in Cambodian maritime territory in the Gulf of Thailand. Reserves also exist in an overlapping claims area, with Cambodia and Thailand negotiating on how to share profits.
Beside Chevron, firms from Thailand, Singapore and Indonesia are also lining up for licenses to probe Cambodian waters.
"We are all excited about the promising perspective of the oil and gas sector in Cambodia," Aun Porn Moniroth, a chief economic adviser to Prime Minister Hun Sen, said recently.
He said successful oil exploration "could lead to energy independence, foreign exchange earnings and employment opportunities" for Cambodia.
Aun Porn Moniroth said his government will strive to make oil revenue "become a blessing for our country and people, but not the curse as has happened elsewhere in the world."
Nigeria - one example of the so-called oil curse - is wracked by massive corruption in part fueled by its vast oil revenues. Although its oil sector contributes 95 percent of export revenues, some 37 percent of its 131 million people live in extreme poverty, according to the World Bank.
In Cambodia, the government has done just enough in fighting corruption to secure aid from donors each year. Last month, Japan's Ambassador Takahashi Fumiaki, whose country has been Cambodia's most generous donor, lashed out at the government for lacking "a sense of urgency" in combating corruption.
Despite Hun Sen's repeated promises to clamp down "we have not heard of any single incident in which high-ranking central government officials are accused or indicted for accepting bribes," he said.
Sek Barisoth, anti-corruption program director for the U.S.-based aid group Pact, says oil revenues might make the Cambodian government even more immune to criticism from civil society and the international community about corruption and human rights violations.
"Look at Burma (Myanmar). It doesn't care who boycotts it or not. It lives within its available resources. Its government treats its people however it wants - 'If you complain, I tighten the clamp on you.' We are afraid this may be the same for us," he said.
"I am praying for it to be pumped for use soon. Our country will also become prosperous," says the 31-year-old man, echoing the sentiments of poor and rich alike.
Impoverished Cambodia is buzzing with excitement about a recent oil discovery by U.S. energy giant Chevron off the southwestern coast, with the government hoping to use oil money to gradually rid the country of its "beggar state" status.
"It is not a pipe dream. The question is will the dream of oil turn into a nightmare of oil?" said U.S. Ambassador Joseph Mussomeli in an interview.
Referring to the "oil curse" experiences of other countries, Mussomeli's comments reflect deep concerns in Cambodia that the oil won't just pump out much-needed hard currency but will also worsen corruption now plaguing the country.
Exactly what lies beneath the seabed is still uncertain but Mussomeli estimated that oil production could generate well over $1 billion a year in revenue, although it might not begin until 2010.
He said the amount will be "an extraordinary jump" for a country that heavily relies on some $500 million a year from donors. Thirty-five percent of Cambodia's 14 million people live below national poverty line of 50 cents a day.
"It's a lot of money to pump into the system," he said. "If Cambodia can put in place the proper mechanisms for accountability and transparency for the oil revenue, then this country can change dramatically in the next decade."
If not, "it simply will make the corruption problem in Cambodia even worse," he said, adding "then the blessing will become a curse."
Cambodia's National Petroleum Authority has not released data about the reserves and Te Duong Tara, its director-general, didn't respond to a request for an interview.
Chevron is currently engaged in exploration drillings in Block A, a site about 140 kilometers (87 miles) southwest of the seaport of Sihanoukville. It holds 55 percent of the block, while Japan's Mitsui Oil Exploration Co. has 30 percent and Chevron's affiliate GS Caltex 15 percent.
Last year, Chevron discovered crude oil in four wells in the block and has plans to drill 10 more through 2007.
"Chevron is encouraged by its results to date in Cambodia," Nicole Hodgson, a Chevron's spokeswoman, said in an e-mail from Bangkok, Thailand.
Additional drilling will help the firm and its partners to "evaluate the true potential of the area," she said.
A joint study by the United Nations Development Program and Harvard University early this year provisionally estimated that just the explored part of Block A held 400-500 million barrels of oil and 3 trillion cubic feet of gas.
There are five other oil blocks in Cambodian maritime territory in the Gulf of Thailand. Reserves also exist in an overlapping claims area, with Cambodia and Thailand negotiating on how to share profits.
Beside Chevron, firms from Thailand, Singapore and Indonesia are also lining up for licenses to probe Cambodian waters.
"We are all excited about the promising perspective of the oil and gas sector in Cambodia," Aun Porn Moniroth, a chief economic adviser to Prime Minister Hun Sen, said recently.
He said successful oil exploration "could lead to energy independence, foreign exchange earnings and employment opportunities" for Cambodia.
Aun Porn Moniroth said his government will strive to make oil revenue "become a blessing for our country and people, but not the curse as has happened elsewhere in the world."
Nigeria - one example of the so-called oil curse - is wracked by massive corruption in part fueled by its vast oil revenues. Although its oil sector contributes 95 percent of export revenues, some 37 percent of its 131 million people live in extreme poverty, according to the World Bank.
In Cambodia, the government has done just enough in fighting corruption to secure aid from donors each year. Last month, Japan's Ambassador Takahashi Fumiaki, whose country has been Cambodia's most generous donor, lashed out at the government for lacking "a sense of urgency" in combating corruption.
Despite Hun Sen's repeated promises to clamp down "we have not heard of any single incident in which high-ranking central government officials are accused or indicted for accepting bribes," he said.
Sek Barisoth, anti-corruption program director for the U.S.-based aid group Pact, says oil revenues might make the Cambodian government even more immune to criticism from civil society and the international community about corruption and human rights violations.
"Look at Burma (Myanmar). It doesn't care who boycotts it or not. It lives within its available resources. Its government treats its people however it wants - 'If you complain, I tighten the clamp on you.' We are afraid this may be the same for us," he said.
6 comments:
Not to worry too much. If the loot is large enough, many people will be happy with the crumps.
SiS
Every Cambodian people must take up arms for the piece of the pie if AH HUN SEN doesn't share the wealth equally!
Khmer people needs to like Thais. Oust the PM by uniting everyone, he cannot killed 10 million people rising against him.
Khmer Society needs change into modern society to catch up with the rest.
I must tell all Cambodian about the oil price now. IN New Zealand the retail price is from NZ$1,42 for 91 and NZ$1,47 for premium oil.
In every litre sold in New Zealand, NZ government earned 59C as tax and another 5C for regional tax. So we have paid 64C in tax per litre.Therefore a litre is costed only NZ$0,625 to NZ$0,675 and at this price oil companies have already made their monies.
1US$ = NZ$ 1,49 So if in Cambodia, the oil companies didn't pay any tax, that mean they made a lot of monies far more than NZ companies. And in NZ, the salaries and wage are high. People earn at least NZ$12/hour working at petrol station.
The "tax" on gas in cambodia is in the form of profits to the oil companies.
Where do those profits go?
If Cambodia finds its own oil, little will change, except the size of those profits. Pump prices might be reduced a little as a sop to the people (after all, instead of having to buy oil on the open market, the oil company gets it directly from the ground. Part of that saving might be passed on to the people as a political sweetener).
It is almost inevitable that the rich and corrupt will profit from this.
Not the people.
If the oil rush did took place and Cambodia remain the same, the people of Cambodia should start thinking of personal sacrify, and ditroy the person/government in charged.
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