Thailand, Cambodia aim for offshore oil development

Map of Cambodia's and Thailand's Overlapping Claim Area (OCA) in the Gulf.

By Prak Chan Thul
Thu Dec 29, 2011

PHNOM PENH (Reuters) - Offshore oil and gas reserves in disputed waters of the Gulf of Thailand could take up to a decade to tap, despite progress between Thailand and Cambodia towards restarting talks on joint development, Thailand's energy minister said on Thursday.

The two countries are keen to reach an agreement on joint exploration and development of the Overlapping Claim Area (OCA) in the Gulf, which has been delayed by political upheaval in Thailand and sometimes deadly border disputes.

Thai Energy Minister Pichai Naripthaphan said Thailand would seek parliamentary approval to restore a decade-old Memorandum of Understanding between the two countries that was scrapped by the previous government when relations deteriorated.

Negotiations on joint development and revenue-sharing would soon follow, he added.

"There are processes that need to be done on both sides but the intention was very good, the relationship was very good and we're certain in the future there'll be no more conflict," Pichai told reporters after a meeting with Cambodian Deputy Prime Minister Sok An, also head of the National Petroleum Authority.

"We want to see this proceed with success because it's for energy security for both countries ... for another 40 or 50 years," he said.

But he accepted it would be some time before oil and gas could be produced in the OCA, which covers 27,000 sq km (16,000 sq miles). "There are a lot of processes and it could be eight to 10 years before a single drop of oil and gas comes."

The two countries had come close to an agreement but that was derailed when former Thai premier Thaksin Shinawatra was overthrown by the military in 2006. However, since his sister, Yingluck Shinawatra, became prime minister in August, diplomatic ties have warmed significantly.

Chevron Corp and Total have exploration rights to Block A in the disputed stretch of the Gulf, which Thailand and Cambodia have both claimed sovereignty over since the early 1970s.

Three Japanese firms -- Inpex, Marubeni Oil and Gas, a subsidiary of Marubeni Corp, and Mitsui Oil Exploration Co, a unit of trading house Mitsui & Co Ltd -- have expressed interest in the reserves.

Pichai said energy officials from the two countries had discussed plans to work together in areas like gas separation, power generation and chemical production, and Cambodian engineers would be invited to train in Thailand.

Cambodian government spokesman Phay Siphan said the two countries also discussed plans to build a power plant in Koh Kong province bordering Thailand, which would purchase most of the electricity.