The government says Cambodia may not produce its own oil until 2015, having stated beforehand an earlier start date. (Photo by: SOVANN PHILONG)Tuesday, 16 June 2009
Written by Ros Dina The Phnom Penh Post
Finance committee chairman says the delay will give the government a chance to build a regulatory framework for companies looking to exploit national reserves
AN expected two-year delay in output from Cambodia's first domestic oil field could be a blessing in disguise for Cambodia, the head of the National Assembly's finance and banking committee told the Post.
Cheam Yeap said a new timeframe for extraction from the Chevron-controlled field announced Friday, which puts the start of production anywhere between 2013 and 2015, would give the government more time to develop laws to govern the sector.
"It is not good to be in too much of a hurry, as we have neither the law nor experts now [to manage the oil resource], and the agreement [with Chevron] is still not clear," he said. "Consequently, losses may happen because we lack these things."
He said he planned to request that the government draft three laws related to the Kingdom's energy reserves - on oil control, oil tax and tax benefits within the energy industry - in a bid to better manage resources.
The Cambodian National Petroleum Authority is also widely considered to be under-funded and ill-equipped to handle the complexities of the oil business, analysts have said.
Hang Chuon Naron, vice chairman of the Supreme National Economic Council, announced the delay Friday in a gathering to launch energy revenue watchdog Cambodians for Resource Revenue Transparency. He said Cambodia would not receive income from oil and natural gas until between 2013 and 2015, two years later than originally planned.
The delay was put down to falling oil prices, but the government's relationship with Chevron has come under the spotlight in recent months after negotiations over an extension to the US energy giant's licence, which expired in April, came to a standstill.
Cheam Yeap said negotiations with Chevron were ongoing, and that the company was still actively exploring extraction. However, he said there was still uncertainty over the amount of oil and natural gas in the field.
Chevron was granted an exploration licence in 2002 to explore a 278-square-kilometre area under Cambodian control in the Gulf of Thailand. It announced in 2005 it had discovered up to 400 million barrels of oil reserves in Block A, and initially predicted oil would begin flowing by 2011. It has since refused to commit to a start date in what it says is a number of small dispersed fields rather than a single large block.
Cambodia has issued licences to explore 37,000 square kilometers under its control in the Gulf of Thailand, and it hopes to also issue exploration rights for a further 27,000 square kilometres in areas still under dispute with Thailand.
According to the International Monetary Fund, government revenue from oil reserves in the Gulf of Thailand could initially reach $174 million a year and climb to $1.7 billion a year after 10 years of development, almost matching the entire government budget for 2009.
AN expected two-year delay in output from Cambodia's first domestic oil field could be a blessing in disguise for Cambodia, the head of the National Assembly's finance and banking committee told the Post.
Cheam Yeap said a new timeframe for extraction from the Chevron-controlled field announced Friday, which puts the start of production anywhere between 2013 and 2015, would give the government more time to develop laws to govern the sector.
"It is not good to be in too much of a hurry, as we have neither the law nor experts now [to manage the oil resource], and the agreement [with Chevron] is still not clear," he said. "Consequently, losses may happen because we lack these things."
He said he planned to request that the government draft three laws related to the Kingdom's energy reserves - on oil control, oil tax and tax benefits within the energy industry - in a bid to better manage resources.
"It is not good to be in too much of a hurry, as we have neither the law nor experts..."The London-based Extractive Industry Transparency Initiative has also been invited to hold four workshops in Cambodia to help guide development of the laws.
The Cambodian National Petroleum Authority is also widely considered to be under-funded and ill-equipped to handle the complexities of the oil business, analysts have said.
Hang Chuon Naron, vice chairman of the Supreme National Economic Council, announced the delay Friday in a gathering to launch energy revenue watchdog Cambodians for Resource Revenue Transparency. He said Cambodia would not receive income from oil and natural gas until between 2013 and 2015, two years later than originally planned.
The delay was put down to falling oil prices, but the government's relationship with Chevron has come under the spotlight in recent months after negotiations over an extension to the US energy giant's licence, which expired in April, came to a standstill.
Cheam Yeap said negotiations with Chevron were ongoing, and that the company was still actively exploring extraction. However, he said there was still uncertainty over the amount of oil and natural gas in the field.
Chevron was granted an exploration licence in 2002 to explore a 278-square-kilometre area under Cambodian control in the Gulf of Thailand. It announced in 2005 it had discovered up to 400 million barrels of oil reserves in Block A, and initially predicted oil would begin flowing by 2011. It has since refused to commit to a start date in what it says is a number of small dispersed fields rather than a single large block.
Cambodia has issued licences to explore 37,000 square kilometers under its control in the Gulf of Thailand, and it hopes to also issue exploration rights for a further 27,000 square kilometres in areas still under dispute with Thailand.
According to the International Monetary Fund, government revenue from oil reserves in the Gulf of Thailand could initially reach $174 million a year and climb to $1.7 billion a year after 10 years of development, almost matching the entire government budget for 2009.
15 comments:
Yeah until everything falls into the hand of the Viet which owns ah Hun Sen's head and everything else khmer!
That's called "tranparency"!!!
Transparency*
Cheam Yeap,
Show us that you are a really Khmer and you love your country. Then, you and your boss Hun Sen should come up with an anti-graft law first. Otherwise, I believe what you just have said there you need more time to figure out how divide the oil money among your cronies and the Viet.
More time for the YOUN to take advantage. That's why Thai wants some piece of pie.
KhmerThai,
OH I can know now the price of oil in cambodia
i think this is a good idea because rushing to do it without study and planning first can cause a lot of corruption problem and so on. a delay to study the plan ahead is a good idea, to say the least. like building a house cannot be done overnight, same concept here.
a delay or postponement is usually for a couple of years only, not eternity or forever, you know. cambodia has to develop the oil production, that has to be done if our country were to compete and develop like the rest of asia and other country on the planet, hello! please think smartly about it. thank you.
Why don't Cambodia call Kuwait or Saudi Arabia for training?? Cause these two nations has experiences.
KhmerMuslim,
Now the oil price for crude oil is like $71.00 per barrel. We must pump it while they can peak the price up soon.
KhmerPP,
Ask China and Hanoi to pump Hun Xen ASS!!!! so it can be soon!
To: Ho Nam Bora,
You should tell Hun Xen that the American would not let Chevrong to drill oil in Cabodia if Heng Sarim did not produce anti corruption law!
If you tell him before every bodyelse you father's chair will be your after your father drop death!
And every in the country would thing you smart too! you may bit up hun Maneth! THey only Hon you are HO!!!!!
Good luck baby Ho!
you fools seem to worry too much! ah sen ah sok ach mee rany mee any are all smiling and see more billion of dollars our into their account...take easy boys they all will eat the cake for you....one thing i know no matter what the poor people will be suffering...
YOu know what the sad thing is? These accusations toward the Vietnamese are valid. And the saddest of them all, there arent too many thing that a Cambodian citizen can do about it. This is it, the last untapped natural resource that will be plunder. Wish we have another civil war.
to change this most corrupted regime in cambodia history, civil war is inevitable and that's the only and only one solution!
As good and honest Cambodian I just would like to remind Chevron that Foreign Corrupt Practices Act (FCPA) of 1977:
1- applies to any business entity organized under the laws of the United States or having its principal place of business in the U.S,
2- prohibits paying, promising to pay, authorizing or assisting in paying for the purpose of obtaining or retaining business,
3- punishes up to 5 years emprisonment and/or a fine of up to 2 000 000 USD.
Quite clear, no?
Beware in the region US Justice Department indicted:
- Nexus Technologies Inc for bribing Vietnamese government officials during 1999-2008,
-the owners of Film Festival Management for bribing the Tourism Authority of Thailand (2008)
I sincerely do not want to hear that it will be your turn in Cambodia next time.
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