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Thursday, November 08, 2007

Cambodia Leader Warns Against Oil Dreams

By Ker Munthit, Associated Press Writer
Cambodian Deputy Premier Warns Against Dreams of Easy Riches From Potential Oil Bonanza

PHNOM PENH, Cambodia (AP) -- Cambodia's dream of seeing money flow from the discovery of oil will not come true overnight, a deputy prime minister said Thursday, in the latest warning against excitement over an anticipated oil bonanza.

The country will also remain dependent on petroleum product imports of around one million tons annually for years to come, said Sok An, a Cambodian deputy prime minister, in a speech at an investment conference.

While Cambodia cherishes a hope to have sufficient oil reserves to start domestic production, "we are cautioned by experienced oil men to be most cautious in our expectations," Sok An said. "We shall have to wait and see."

Offshore oil has been a much-talked-about topic in Cambodia in recent years following a discovery by U.S. energy giant Chevron Corp. in 2005. Companies from Australia, China, France, Indonesia, Malaysia, Singapore and South Korea have also expressed interest in exploring Cambodian seas for oil, and the government wants to use oil revenue to develop the country and reduce poverty.

Annual per capita income in Cambodia doubled to US$513 (euro348) in 2006 from US$247 (euro168) in 1994, but the country remains among the world's poorest. Some 35 percent of its 14 million people live below the national poverty line of just 45 U.S. cents (euro0.31) a day.

And Sok An's comments may mean expensive imported fuels will continue to burden the country. Standard quality gasoline stands now at 4,350 riel (US$1.07; euro.73) a liter; premium is at 4,450 riel (US$1.1; euro.75) per liter.

The Cambodian government is trying to manage expectations amid uncertainty over the oil discovery, said Sin Foong Wong, the country manager of International Finance Corporation, an arm of the World Bank.

"It's a fine line they're trying to sort of tread. On one hand, we don't know really the size of the discovery and it will take time to appraise it, but at the same time they are also cautiously optimistic," he said.

Chevron has been conducting exploration in an offshore area called Block A, about 200 kilometers (77 square miles) west of Sihanoukville, Cambodia's coastal city 185 kilometers (115 miles) southwest of the capital Phnom Penh.

The company has so far drilled 15 wells in the area and is appraising the discovery to determine the extent of the reserves, Sok An said. Even if the find proves commercially viable, first oil production will not commence until "early next decade," he said.

"Of course, we all hope that the technical results of Chevron's evaluation of its discoveries will be good for Cambodia," he said.

But "until there are firm field development plans on the table, we should not consider any of the oil discoveries as constituting proved recoverable reserves," he added.

A total 27 wells have been drilled offshore Cambodia, Sok An said, without revealing other companies involved in exploration work.

Critics and observers have expressed concerns that income from oil could exacerbate Cambodia's already widespread corruption if the government fails to develop proper legal environment to manage the expected revenues.

"People worry maybe the government's going to squander" oil revenues, said Andrew Symon, a senior adviser of Menas Associates, a British consulting firm. Symon, whose work focuses on energy and natural resources, is based in Singapore.

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Viet Nam and Cambodia vow to develop trade during visit

PHNOM PENH — Viet Nam and Cambodia should further develop co-operation in industry and trade and effectively implement signed bilateral and multilateral agreements and mutual development commitments to support regional and international integration.

The statement was made by Cambodian Prime Minister Hun Sen when receiving Viet Nam’s Minister of Industry and Trade Vu Huy Hoang in Phnom Penh on Monday.

On the same day, Minister Hoang was received by Deputy Prime Minister and Chairman of the Cambodian National Petroleum Authority Sok An.

Sok An expressed the need to strengthen co-operation between Viet Nam and Cambodia in industry and trade, especially in oil and gas exploration and exploitation. He affirmed that Cambodia was ready to boost oil and gas co-operation with foreign partners, including Viet Nam.
At a working session with Cambodian Minister of Industry, Mines and Energy Suy Sem, the two sides signed a memorandum of understanding on speeding up the construction of a 220kV transmission line between Viet Nam and Phnom Penh through the border Takeo Province as well as a 110kV power transmission system in the border Kompong Cham Province.

They also agreed to jointly implement projects in industry, mining and energy that are part of a co-operative programme approved at the 9 th session of the Viet Nam-Cambodia Intergovernmental Committee in Phnom Penh on August 21.

These include projects to build a hydropower plant on Se San River, establish a mineral exploitation joint venture and train labour for Cambodia.

Minister Hoang and Cambodian Minister of Trade Cham Prasit signed a memorandum of understanding stating that Viet Nam would allow Cambodia to enjoy tariff incentives and non-quota policies on 25 agricultural products.

The two ministers affirmed that two-way trade between Viet Nam and Cambodia would reach U$1 billion this year.

During its stay in Cambodia from November 4 to 6, the delegation worked with the Cambodia Development Council and attended the closing ceremony of the Viet Nam-Cambodia Trade Fair 2007 in Phnom Penh. — VNS
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Cambodia's ruling party victorious in 2008 national election

PHNOM PENH, Nov. 8 (Xinhua) -- The ruling Cambodian People's Party (CPP) will comfortably win the July 27, 2008 national election, according to the results of survey conducted by an independent political observer, the Institute for Civic Education (ICE), local media said on Thursday.

The preliminary findings of ICE found that based on previous election results, the CPP may obtain 61 parliamentary seats, the Sam Rainsy Party (SRP) 42, with other parties sharing the remaining 20, reported Cambodian-language newspaper the Sralanh Khmer.

However, SRP president Sam Rainsy said the prediction is not necessarily 100 percent accurate.

"For CPP, we have observed that in past commune elections, it has received increasing votes, but in national elections, it received less," said Sam Rainsy, arguing that his party will win in the upcoming election as more and more voters are supporting his party.

Although predicting that CPP may win the forthcoming election, the survey doesn't rule out the decisive factor of the 2.5 million voters absent in the 2007 commune election, reported another Cambodian-language newspaper the Koh Santepheap.

There will surely be great change if they go to vote in the 2008 election, the paper added.

In the 2007 commune election on April 1, CPP won most posts in the communes, while SRP trailed CPP with its quality performance.

CPP has co-governed the kingdom with the Funcinpec Party for more than a decade. SRP has emerged as the largest opposition party in recent years.

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