Chevron to start producing oil in Cambodia in 2011

March 28, 2008

The Cambodian government estimates that U.S. oil giant Chevron will be able to recover 15 to 20 percent of the estimated 500 million barrels of oil in its offshore exploration block, starting in 2011, national media said on Friday.

Engineering plans for how to extract the oil and get it to shore, as well as details of Chevron's commercial terms, are still being worked out, Te Duong Tara, secretary general of the Cambodian National Petroleum Authority (CNPA), told English-Khmer language newspaper the Cambodian Daily at an industry seminar hereon Thursday.

Chevron, which along with minority partners Mitsubishi and GS Caltex controls off-sea Block A, has remained mum about the size of its find and when and if it will commence commercial exploration.

Chevron signed a revenue-sharing agreement with the Cambodian government in 2003, the terms of which are now under renewed negotiations.

Some dozen foreign drillers are now searching for oil and natural gas in six defined blocks in off-sea Cambodia.

Chevron once claimed it had found the resource in its test wells, while other drillers still remained silent.

Experts used to put the potential reserves of oil in offshore Cambodia at two billion barrels, but the Cambodian government usually appeared unsure of various estimates.

Source: Xinhua

Oil Official Predicts 2011 Production [-Experts: No guarantee that the production of oil would lead to prosperity for all]

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
26 March 2008

Cambodia expects to start production of its off-shore oil in 2011, a senior national oil official said Wednesday.

Production could begin "if there is no delay," said Te Duong Dara, director-general of the Cambodian National Petroleum Authority, on the sideline of a conference between officials and international oil experts. "We will produce the first oil products for Cambodia in 2011 to reduce the import of oil."

The government's ministries were "working all together" to create proper laws and attract investment, he said.

"If we have the right laws and transparency, foreign investors will come to make their business with us," he said.

Estimates for six blocks of offshore development are in the hundreds of millions of barrels of crude and three times as much natural gas.

Experts warned Wednesday there was no guarantee that the production of oil would lead to prosperity for all.

"Economic growth in resource-rich developing countries has been on average two to three times lower than resource-poor countries," said Jo Scheuer, Cambodia director for UNDP, which sponsored the conference. "Many assume that the discovery of oil and gas reserves automatically translates into greater prosperity. Unfortunately, this is not the case."

Council Minister Sok An, who is also chairman of the national petroleum authority, said Wednesday Cambodia viewed the production of oil as a "vital step in contributing to the country's sustained economic development."

The government is responsible for transparency, he said, and managing the oil revenue to reduce poverty.

CNPA's Te Duong Dara: Cambodian oil production to start in 2011 [-Information on companies involved in the exploration still in the dark]

Cambodian oil production to start in 2011: energy official

PHNOM PENH (AFP) — Cambodia expects to begin oil production in 2011, a senior energy official said Wednesday amid warnings that new-found petroleum reserves did not guarantee instant prosperity for the impoverished country.

"If there is no delay, we are planning the first oil production for around 2011," said Te Duong Dara, director-general of the Cambodian National Petroleum Authority (CNPA), speaking at a conference of global industry experts and energy company officials in Phnom Penh.

He declined to say how many companies were currently exploring for oil in six vast blocks off Cambodia's shores.

Following the discovery of oil in 2005 by the US energy giant Chevron, Cambodia was quickly feted as the region's next potential petro-state, sitting on an estimated hundreds of millions of barrels of crude, and three times as much natural gas in six blocks located off of the coast.

Chevron, the most active of several firms exploring the fields, remains mum, saying only that its test wells have found that the oil and gas is "dispersed rather than located in one core field," according an earlier statement.

Government optimism has also been blunted, with Prime Minister Hun Sen warning late last year that it was "highly premature" to estimate how much oil Cambodia might hold in undersea reserves after other officials projected that the country could begin production in 2009.

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.

"Many assume the discovery of oil and gas reserves automatically translates into greater prosperity. Unfortunately, this is not the case," Jo Scheuer, Cambodian country director of the UN Development Agency, said Wednesday.

"Economic growth in resource-rich developing countries has been on average two to three times lower than resource-poor countries," he added.

"Cambodia's non-renewable resources are important assets that must be used wisely."

While GDP growth estimates remain some of the highest in the region, averaging 11 percent over the past three years, nearly a third of Cambodia's 14 million people survive on only 50 US cents a day or less.

Despite their uncertainty over how much oil can be pumped from Cambodia's reserves, government officials are adamant that petroleum profits would not be squandered, saying the sector is essential to the country's continued growth.

"The discovery of oil and gas ... is a vital step in contributing to the country's sustained economic development," said Deputy Prime Minister Sok An, who also chairs the CNPA.