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Oil production to start in 2011, says Cambodian energy official

©

Latest update : 2008-03-26

Cambodia expects to begin oil production in 2011 amid warnings that new-found petroleum reserves do not guarantee instant prosperity for the impoverished country.

PHNOM PENH — Cambodia expects to begin oil production in 2011, a senior energy official said Wednesday amid warnings that new-found petroleum reserves did not guarantee instant prosperity for the impoverished country.

 

"If there is no delay, we are planning the first oil production for around 2011," said Te Duong Dara, director-general of the Cambodian National Petroleum Authority (CNPA), speaking at a conference of global industry experts and energy company officials in Phnom Penh.

 

He declined to say how many companies were currently exploring for oil in six vast blocks off Cambodia's shores.

 

Following the discovery of oil in 2005 by the US energy giant Chevron, Cambodia was quickly fêted 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 exploring the fields, 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 an earlier statement.

 

Government optimism has also been blunted, with Prime Minister Hun Sen warning late last year that it was "highly premature" to estimate how much oil Cambodia might hold in undersea reserves after other officials projected that the country could begin production in 2009.

 

Concerns have also been raised over how Cambodia one of the world's most corrupt countries would use its new-found oil and gas wealth.

 

"Many assume the discovery of oil and gas reserves automatically translates into greater prosperity. Unfortunately, this is not the case," said Jo Scheuer, Cambodian country director of the UN Development Agency.

 

"Economic growth in resource-rich developing countries has been on average two to three times lower than resource-poor countries," he added. "Cambodia's non-renewable resources are important assets that must be used wisely."

 

While GDP growth estimates remain some of the highest in the region, averaging 11% over the past three years, nearly a third of Cambodia's 14 million people survive on only 50 US cents a day or less.

 

Despite their uncertainty over how much oil can be pumped from Cambodia's reserves, government officials are adamant that petroleum profits would not be squandered, saying the sector is essential to the country's continued growth.

 

"The discovery of oil and gas is a vital step in contributing to the country's sustained economic development," said Deputy Prime Minister Sok An, who also chairs the CNPA.

Date created : 2008-03-26

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