Cambodian PM sets Chevron oil production deadline

Tuesday April 6, 2010
AFP

Cambodian Prime Minister Hun Sen said Tuesday he would terminate his country's contract with Chevron if the US energy giant does not begin oil production from offshore fields by late 2012.

Following the discovery of oil in 2005, Cambodia was quickly feted as the region's next potential petro-state, but production has stalled as the government and Chevron appear to have failed to agree over revenue sharing.

"There is no oil production yet, but we have said that Chevron must produce oil by late 2012, otherwise we will have to terminate the contract, (if) negotiation cannot reach an agreement," Hun Sen said.

The Southeast Asian nation is sitting on an estimated hundreds of millions of barrels of crude, and three times as much natural gas.

It remains unclear how much can actually be recovered, or if potential revenue would be used to benefit Cambodia. Previously the premier has warned it was "highly premature" to estimate how much oil underseas reserves might hold.

On Tuesday Hun Sen dismissed concerns over how Cambodia -- ranked among the world's most corrupt countries -- would use its new-found oil and gas wealth.

"Up to this hour, there is not even a drop of oil, but they have been talking about corruption from crude oil since 2002-2003," the premier said, at a meeting of agricultural officials.

"Don't talk about using the money, but let's talk about making money. I am a bit angry when they talk about corruption as we have not had a drop of oil," he added.

Last year a report by London-based corruption watchdog Global Witness criticised Chevron for failing to disclose the amount of money it allegedly paid to secure rights to drill for Cambodia's offshore oil.

The report, called "Country for Sale", said revenues from Cambodia's oil and mineral wealth were "jeopardised by high-level corruption, nepotism and patronage" in allocating and managing the assets.