Cambodia's oil bonanza muted by uncertainties

PHNOM PENH, June 10 (AFP): Two years after discovering oil off its coast, uncertainty clouds Cambodia's nascent petroleum sector, with analysts saying it is impossible to gauge the extent of the country's fuel deposits or their impact on one of the world's poorest economies.

Predictions of vast new wealth are now being reconsidered, with some international institutions already drastically scaling back previous estimates of a billion barrels of oil.

Even Prime Minister Hun Sen has tempered earlier claims that the country would begin tapping oil by 2010, saying last week that Cambodia's petroleum prospects were now "uncertain".

"Oil under the sea is still a dream," he said Wednesday.

Diplomats have reacted with caution to Cambodia's possible petroleum windfall amid rising hopes that annual revenues would dwarf the current budget and pull the country out of poverty.
"Whether Cambodia will ultimately benefit from its future oil revenue is uncertain," said US Ambassador to Cambodia Joseph Mussomeli.

Analysts agree that it is too early to tell how oil could impact Cambodia, where 35 per cent of the population lives on less than 50 US cents a day.

"The exact size of the reserves, how much is entirely recoverable, is still unknown," said International Monetary Fund advisor Jeremy Carter.

"One has to hold off from making very large-scale assumptions about what will happen," he said.
Momentum, however, is building after the US energy giant Chevron announced two years ago that it had struck oil in four of five wells dug in the waters off Cambodia's southern coast.

While Chevron confirms the presence of oil and continues drilling, the company has not released any data from Block A, one of six open to exploration in Cambodia's water in the Gulf of Thailand.

But the sheer size of estimated deposits-the government has tentatively put petroleum reserves in Block A alone at 700 million barrels-has other internationals rushing into talks for exploration and production rights.

The government has divulged very little about these negotiations.

But companies from Thailand, Singapore, Malaysia, Indonesia and Kuwait, as well as China's state energy giant CNOOC, have all bid for rights in other blocks, said Te Duong Tara, executive director of the Cambodian National Petroleum Authority (CNPA), at a conference in February.