Are we going to have a Cambodian oil producer?

By Albeiro Rodas 
The Asian Correspondence

Sep 28, 2012

It is likely possible, but not yet. At least it is what we can speculate from the present conditions. Oil production needs high responsibilities, big investments, zero corruption, infrastructure, environment compromises and a new legislation. Cambodia has much to do in all these conditions. It is expected that Chevron will receive a green light from the Cambodian government for a production permit. As gas and oil explorations are made in the off Cambodia’s coast, it adds a new situation: another territorial dispute with Thailand in a sea area of 26,000 square kilometers. As we know by history, the presence of oil and gas in a border territory dispute will bring high level interest of sovereignty. The fact of an oil and gas rich sea platform will heat the dispute if negotiators do not put peace over gain interests on the table. 

We can see this study of Thai Captain Somjade Kongrawd: Thailand and Cambodia Maritime Disputes. He writes in page 5 of the Conclusions:

‘It would also need sufficient knowledge about the area in order that one can know which areas are full of oil and gas or less. However, for the present moment only the oil giants of Chevron, Amoco, British Gas, UNOCAL and BP may have this secret weapon. The clear information on resources would make negotiation much easier and avoid the bad luck which the final boundary decision may bring. Thai may end up in the wrong side of the line.’ – Somjade Kongrawd.

Of course, the wrong side of the line would be that part without gas or oil.

But the Thai problem here is not the only threat to a perspective of Cambodian oil production, something that would be great for a developing economy like Cambodia. Some experts point out another menace, more internal and, probably, more difficult to end if there is not a political will to stop it: administrative corruption. According to Julian Boys, an economic justice researcher in an article to The Guardian (2011), ‘Cambodia must get a fair deal for its natural resources, and the revenues should go towards improving lives of its people,’ he wrote. Boys prevents Cambodians from becoming the same as oil-rich Nigeria ‘where the industry has fueled corruption and environmental catastrophe.’ Nigeria is by sure the most evident case of a fiasco in its oil exploitation, but there are other countries to see like Hugo Chavez’s Venezuela where oil production is used as an political instrument either inside or outside the country. To this, CNN reporter Michael Martinez said about the explosions in the Amuay refinery last August 26 killing 42 person: ‘The state-run oil company that operates the refinery has been hampered by how Venezuelan President Hugo Chavez uses the refineries as ‘a cash cow’ to fund social programs such as building homes for low-income voters, taking funds away from plant improvements,´ he writes citing local analysts.

For the moment, let’s wait the interest of Chevron to develop the Cambodian oil dream next year will be possible and that it will become an opportunity for a more sustainable Cambodian development where all Cambodians can enjoy the revenues of a promissory economy.

See also this Aljazeera report (2007), Cambodia’s new oil wealth, when the issue of Cambodian oil began.

The encroached Cambodian sea territory in the Gulf of Siam.

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• Thailand and Cambodia must immediately withdraw their troops, ruled the International Court today