Kingdom considers oil imports from Iran [refined in Cambodia and then sold to China starting in 2014]

Sieam Bunthy and Don Weinland with additional reporting by Reuters
Monday, 30 January 2012
The Phnom Penh Post

Cambodia plans to import and refine oil from Iran, a spokesman from the Council of Ministers has said, just one among several proposed forms of strengthened co-operation between the two countries.

The announcement comes at a time when the United States and European Union have approved some of the toughest sanctions yet against the Islamic country.

Cambodian officials have maintained that the Kingdom will take foreign direct investment from all interested nations.

The US Embassy in Phnom Penh said yesterday that it expected all United Nations members to take into consideration US regulations when dealing with Iran.

Deputy Prime Minister Sok An and Iranian Ambassador Seyed Javad Ghavam Shahidi agreed on Thursday to strengthen economic ties between the two countries, Council of Ministers spokesman Ek Tha said yesterday.

Among the proposed economic activity were oil imports from Iran, which would be refined in Cambodia and then sold to China starting in 2014, Ek Tha had said at a press conference on Thursday.

Construction on Cambodia’s first oil refinery, located on 365 hectares in Sihanoukville and Kampot provinces, will begin in April and finish in 2014, the Post reported last month.

Domestically owned Cambodian Petrochemical Company, China National Automation Control System Corporation and China’s Sino March Company will invest US$2 billion in the refinery.

Cambodia Petrochemical’s Han Kheang said yesterday that he has met with the Iranian ambassador twice to discuss the oil imports.

Other proposed economic cooperation between the two countries included agricultural exports to Iran, as well as Iranian investments in medicine and education in Cambodia, Ek Tha said.

The two countries signed a memorandum of understanding to cooperate on oil and gas projects last year, he said.

The United States and European Union imposed sanctions this month that would cut off crude oil exports from Iran on July 1. The move came on the longstanding concern that Iran’s nuclear programme is aimed at developing weapons.

Iranian lawmakers yesterday were set to vote on a ban on exports to the EU in retaliation to the sanctions. Inspectors from the International Atomic Energy Agency arrived in Tehran yesterday in the hopes of resolving questions surrounding the country’s nuclear programme.

Cambodia will not take into account the foreign policies of other countries toward Iran when considering investment in the Kingdom, Ek Tha said.

“We do not discriminate where our FDI comes from,” he said via phone, adding that the deepening of cooperation with Iran was strictly civilian, not military.

“Some Western countries put economic sanctions on [Cambodia] after we toppled the Pol Pot regime. We have learned some hard lessons about the damage of sanctions, so we will keep our economy open.”

Sean McIntosh, spokesman for the US Embassy in Phnom Penh, said members of the United Nations shouldn’t ignore US policy toward Iran.

“We expect all UN members to strictly enforce UN [Security Council] relations and to consider carefully the impact of new US regulations when considering engaging in economic activity with Iran,” he said in an email yesterday.

Iran has refused to address the international community’s concerns about its nuclear programme, McIntosh said, citing a recent statement from Secretary of State Hillary Clinton.

Although an increase in economic activity between Cambodia and Iran could draw negative attention from the West, Cambodia has never appeared to violate UN sanctions, Carlyle Thayer, a political science professor at the University of New South Wales, said via email yesterday.

“Cambodia’s relations with North Korea and Iran would of course attract scrutiny from the US and other Western countries because of UN sanctions. But there is no hint that Cambodia is violating these sanctions in its relations with Iran or North Korean,” he said.

A North Korean delegation arrived in Phnom Penh in July to discuss strengthening economic and trade relations with Cambodia, the Post reported last year.