The National Petroleum Authority’s director-general and an oil industry expert disputed National Assembly President Prince Norodom Ranarridh’s claim Tuesday that a team led by Chevron Overseas Petroleum has discovered commercially viable crude oil deposits in Cambodian coastal waters.
Director-General Te Doung Tara said the prince’s comments were premature, while the technical expert said the oil reserves that explorers discovered are not sufficient for commercial extraction.
Outside the Assembly on Tuesday, Prince Ranariddh said, “This morning Prime Minster Hun Sen told me they found crude oil…. We can develop our economy…. The Mekong River is our white gold, now we have the black gold.”
But Te Doung Tara said Wednesday: “You cannot link the results of exploration with reserves.
“Prince Ranarridh as a politician has the right to say what he said,” said Te Duong Tara, but he added that it would take “two to three years” to discuss the commercial viability of the reserves.
“It is too early to talk about the reserves,” he said, emphasizing that Chevron has not announced official results of its exploration.
Prince Ranariddh on Tuesday had said extraction was to begin in 2007.
Te Doung Tara declined to repeat a comment attributed to him Wednesday by the official Chinese news agency Xinhua in which he estimated the oil reserves, located 140 km south of Sihanoukville, to be about 400 million barrels.
An oil industry technical expert familiar with Chevron’s exploration, speaking on condition of anonymity, confirmed Wednesday that Chevron has found oil and gas deposits but said that they are not big enough to justify commercial investment.
He said that even if the 400 million-barrel figure is correct, it is still not nearly enough to justify pumping oil. He said that at least 2 trillion to 3 trillion liters, or 12.5 billion barrels, would be necessary.
“I feel that what Chevron confirmed was a technical discovery,” he said.
Say Sokha, economic adviser to Deputy Prime Minster and Chairman of the National Petroleum Authority Sok An, said Wednesday that he is not sure whether the crude oil discovered by Chevron is enough to justify extraction.
“If we can really know how large the amount of petroleum is, and if it is enough for commercial operations, it is a huge potential for the country’s economic growth,” Say Sokha added.
Opposition lawmaker Son Chhay said he had heard rumors of crude oil deposits many times but there is yet to be any real confirmation.
Son Chhay said people should not to be too surprised by Prince Ranariddh’s announcement and he speculated that some business people may benefit from rumors about oil discoveries.
He also warned that if the rumors do turn out to be true, the government is not adequately prepared.
“What the government must do is establish a law that can bring profit-sharing to Cambodia,” he said.
Chevron Overseas Petroleum was granted a 70 percent interest in a 6,278-square-km offshore bloc on March 20, 2002. The remaining 30 percent stake was awarded to a subsidiary of Mitsui Oil Exploration Co.
The terms of the concession are not public knowledge. It is unclear how long Chevron and its partners have been granted to operate their concession and how much the country would profit.
According to Prince Ranariddh’s statement, the International Monetary Fund has urged Cambodia to set up a regulatory framework before setting up a petroleum industry.
“We hope the exploration… would bring economic benefit to the people of Cambodia as well as the companies,” Sok An said at the August 2002 signing ceremony for the concession,
At the time, Sok An said a comprehensive petroleum development strategy for managing exploration, distribution, transportation, refining and trade would be developed.
This plan has not been made public.