Cambodia PM: Speculation Over Oil Fortunes 'Premature' - AFP

PHNOM PENH (AFP)--Prime Minister Hun Sen said Wednesday it was "highly premature" to estimate how much oil Cambodia might hold in undersea reserves, blunting earlier optimism that a petroleum windfall could pull the country out of poverty.

Officials had forecast that oil production could begin as early as 2009.

Block A alone, where Chevron (CVX) has exploration rights, was said by some petroleum officials to reportedly hold as many as 500 million to 700 million barrels of oil.

But to date no reliable reserve figures have been released and Hun Sen adopted a cautious approach towards any potential oil revenue.

"There has been much speculation about the extent of the petroleum resources of Cambodia. All I can say is that much of that speculation is highly premature, " he told a biannual investment and trade meeting.

"The ultimate extent of our petroleum resources is very much unknown," he added.

Following the discovery of oil two years ago by the U.S. energy giant Chevron, Cambodia was quickly feted as the region's next potential petro-state, sitting on an estimated hundreds of millions of barrels of crude, and three times as much natural gas in six blocks located off of the coast.

Chevron, the most active of several firms preparing to further probe the fields off of Cambodia's coast, remains mum, saying only that its test wells have found that the oil and gas is "dispersed rather than located in one core field," according to a spokesperson.

Still, Hun Sen said the government was in discussions with investors about constructing a refinery in the coastal town of Sihanoukville, which will likely become the hub of any Cambodian oil sector.

"In case this project is finalized, the oil refinery plant will be in operation in 2010," he said.

Hun Sen again downplayed concerns that any oil revenue would evaporate in Cambodia's corrupt bureaucracy, echoing his earlier statements that a petroleum bonanza would not be a "curse" for the resource-rich country, which despite its natural wealth remains of the world's poorest.

"Revenues from those resources will enable Cambodia to self-finance productive investment in order to reduce poverty and promote economic growth," he said.

While GDP growth estimates remain some of the highest in the region at around 9.5% , nearly a third of Cambodia's 14 million people survive on only 50 U.S. cents a day or less.