[Thai] PM grilled over Cambodian oil rights claims

Praphan: Wants live television debate

Abhisit says allegations are 'totally groundless'

15/02/2011
Bangkok Post

The People's Alliance for Democracy is challenging Prime Minister Abhisit Vejjajiva to clarify the group's claim that Thai political groups have a vested interest in oil wells in Cambodia.

PAD spokesman Parnthep Pourpongpan said yesterday the PAD had fresh evidence of Thai political groups' interests in Cambodia, and it wanted the prime minister to explain the issue.

Praphan Koonmee, spokesman for the PAD splinter group, Land Protection Power, said the PAD wanted the prime minister to hold a live TV debate with the group on the issue.

He said the media should be allowed to freely question each speaker so the public could weigh up the information from both parties.

Total pays Cambodia 28 mln dollars for oil exploration: PM [-More "social funds" revealed by Hun Xen]

27/04/2010
AFP

French oil company Total has paid 28 million dollars for the rights to explore an area in the Gulf of Thailand, Cambodia's Prime Minister Hun Sen said Tuesday.

The Cambodian government, during a visit by Hun Sen to Paris, announced its decision in July last year to grant Total the right to search for oil and natural gas in the country's offshore "Block 3".

Disclosing the price paid by Total for the first phase of the search for oil in the area, Hun Sen said that eight million dollars of the money would go towards a "social fund".

"Total offered the highest (bid) among the companies," he said.

Total will pay an additional 20 million dollars if it starts drilling for oil in the offshore area, Hun Sen added.

At the same time the premier denied Anglo-Australian mining giant BHP Billiton paid a large bribe for an exploration contract in Cambodia, saying that money had also gone into a social fund.

Total "also has paid this kind of money," Hun Sen said during a meeting between the government and private sectors.

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.

Hun Sen said earlier this month 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.

Concerns have also been raised over how Cambodia -- one of the world's most corrupt countries -- would use its new-found oil and gas wealth.

Crude Prices To Stanch Oil Flow: Experts

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
27 January 2009

While Cambodia waits for the oil to flow from its offshore blocks, potentially yielding millions of barrels and billions of dollars, industry experts have lowered their expectations.

“It is a very risky business. Oil is sticky, and it likes to stay in the ground,” said Michael McWalter, an oil and gas expert at the Asian Development Bank and advisor for Cambodia’s National Petroleum Authority. “If it is sticky, the water will flow instead. So the oil recovery level is very low, and oil that has been recovered has no gas with it.”

The World Bank estimates Cambodia’s total offshore oil potential at up to 2 billion barrels in six blocks in the Gulf of Thailand.

Block A alone could hold 400 million barrels. It is under exploration by the US giant Chevron in cooperation with Japan’s Mitsui Oil Exploration and South Korea’s Caltex. The remaining blocks are under investment by 13 companies, from France, Kuwait, Sweden, Singapore, China and others.

Chevron is still leading in exploration, but the company has already encountered the problem of dispersion—where oil deposits are scattered in pockets underground, rather than in giant reservoirs.

Cambodia’s offshore crude is dispersed, “rather than in one core field, which makes investment hard,” said Men Den, deputy director of the Cambodian National Petroleum Authority. “So it costs more to produce oil.”

Meanwhile, McWalter said low crude prices could mean Chevron won’t be able to start pumping oil by 2011, as it once expected.

“Although all the planning has been done, the circumstances are so different now for the oil industry,” he said. “Even if you can submit the development plan tomorrow, you need more time to check and approve, and a long time to prepare. So it’s hard to believe that any company can produce oil in 2011.”

Chevron is the largest oil investor in Cambodia, spending more than $100 million to explore 6,000 square kilometers in Block A, which lies under the sea 140 kilometers southwest of Sihanoukville town.

Chevron spokesman Gareth Jonhstone told VOA Khmer the company would not discuss start-up dates, but Chevron and its partners in Block A were “working closely with the Royal Government of Cambodia to complete the fiscal and legal framework for the development of petroleum resources in Cambodia.”

While some skeptics warn that the potential billions of dollars from the oil fields must not be used to line corrupt pockets, experts point out the costs and risks of the ventures themselves.

The natural conditions for Cambodia’s oil blocks is not good, the price of exploration technology high and the value of crude oil dropping, McWalter said.

Phat Bunne, an oil and gas expert at the Cambodian Institute of Technology, agreed, saying offshore oil could turn out to be less than expected and deal failure to prospective companies.

Men Den said it all comes down to the price of crude.

“If the oil price falls, no oil [production] starts,” he said. “If the oil price decreases more, or even stays at the same low level, I believe none of the companies can go ahead."

Chevron is uncertain about the results of its oil explorations in Cambodia

Rasmey Kampuchea newspaper
4th November, 2008
Translated from Khmer by Khmerization

Mr. Sok An, Deputy PM and Minister in charge of the Council of Ministers, has told IMF officials that the Cambodian government has not received any clear answers from Chevron of when they can extract oil off the Cambodian coast.

On 3rd of November, Mr. Sok An has led a delegation to meet with officials from the IMF, led by Mr. David Cowen (spelling?), head of IMF’s Pacific region.

In the meeting, Mr. Cowen sought to find out about oil explorations in Cambodia and about mineral exploration concessions in Cambodia.

Mr. Penn Ngoeun, spokesman for the Council of Ministers, said that, during the meeting the IMF’s officials wanted to know about the size of the oil and gas deposits in Cambodia and also wanted to know the time that those oil and gas deposits can be extracted.

Mr. Sok An has told the IMF’s officials that there are some successes in the oil explorations. These successes have come from the Chevron’s concessions, a reputable American company, which the government hope will be able to extract oils and gases in the near future. And after Chevron knew about the amount of the oil and gas deposits, they will have to negotiate with the Ministry of Finance in relations to the rate of tax it has to pay and the share ratio between the Cambodian government and Chevron. This contract has not been worked out yet. Mr. Sok An said that this sort of contract is very complex, but he stated that he will push for it to be finalised soon.

When the contract with the Ministry of Finance is finalised, Chevron will have to design a master plan of its oil exploration works.

Mr. Sok An has said that Chevron has not told the government of when it can extract the oil deposits. Chevron has told the government that it can extract oils by 2010 but later said 2011 and later said maybe after 2012.

The meeting with the IMF’s official has also focussed on the economic slowdown of the Cambodian economy as well.

Mr. Sok An said that the IMF’s forecasts have affected the Cambodian economy. The IMF claimed that Cambodia has 3 important sectors that can help the economic growths and they are: textile industry, tourism industry and agriculture. The textile and tourism industries are affected by the downturn in world economies. In the agricultural sector, the IMF has evaluated 2 factors that can be affected by the downturn in world’s economies. First, the appreciation of the dollars which makes the buyers paying more for exports from Cambodia. This can lead to the buyers cutting down their orders and it can cause a drop in foreign investments. So, the IMF’s forecasts for Cambodian economic growth is only 7% for this year and next year.

IMF has was also worried about the low salary of the Cambodian public servants in comparisons with other countries. It said that this level of salary will affect the performances and productivity of those public servants. IMF recommend that Cambodia reform its public service sector so that the public servants can receive better pays and therefore can increase their performances and productivity.