Thai instability blamed for delays in oil talks

Written by Ros Dina

Monday, 25 May 2009 Phnom Penh Post

Negotiations on overlapping areas in Gulf of Thailand stalled by political unrest, says CNPA, after Chevron's call for resolution. Photo by: Kay Kimsong Drill rods for oil exploration to be used by Chevron in the Gulf of Thailand sit on the quayside at Sihanoukville Port in this file photo. Following calls by the US oil giant for a resolution to offshore demarcation disagreements, the government in Phnom Penh said Thai instability was to blame for the impasse. THE Cambodian oil authority said at the end of last week that Thailand's recent political instability had delayed negotiations between the two countries over the vast disputed offshore area in the Gulf of Thailand that potentially holds marketable oil reserves. Te Duong Dara, director general of the Cambodian National Petroleum Authority (CNPA), said that Thailand's recent turmoil and change of personnel in government meant that a clear policy on the issue had not been established in Bangkok, adding that Cambodia would have to wait until its neighbour's political situation improved before readdressing demarcation of the disputed 27,000-square-kilometre offshore area. "Specific work teams are needed for negotiations, but they are not in place yet. For us, there are no changes, but Thailand has political instability. They do not have a work team leader or technology team leader yet, so we have to wait until the political turmoil subsides." Thai embassy First Secretary Kamrob Palawatwichai declined to comment on Sunday. An oil industry specialist working for a Thai company who declined to be identified said Sunday that delays in the process were partly due to political instability, meaning that policy and personnel on the issue had yet to be decided in Bangkok, but added there were additional factors. He said that low oil prices meant that the incentives for new exploration were not currently there, while uncertainty of deposits in the disputed area was likely another factor - if the area was known to hold large deposits, undoubtedly the process of resolving the issue would speed up, he added. [oil companies] want both countries to find a solution as soon as possible. The Bangkok Post reported last week that the US-based energy company Chevron - which operates Cambodian offshore concession Block A - had called upon Cambodia and Thailand to speed up negotiations on disputed offshore areas where, it said, it was "ready to take part in developing ... as soon as the resolution is made". "They [oil companies] want both countries to find a solution as soon as possible so that they will benefit from a solution," Te Duong Dara said in response to Chevron's call. Government Spokesman Khieu Kanharith reacted at the end of last week by saying that Chevron did not need to push the issue given that Cambodia has been working on a resolution to the overlapping-claims issue for some time. Te Duong Dara said that the Kingdom remained in discussions with Chevron over an extension to the operating licence for Block A, which could extend for a further two months, he added, despite the last agreement having expired in April. "We have our own strategies for negotiating, and we will see what the result is," he said, adding that it would take up to a further three years to market oil from the offshore block. Both sides have refused to disclose details on the negotiations.